How to qualify for a new construction loan..

[Mario F.]

Hello, I've been interested in purchasing an old duplex in Northeast Los Angeles. It's going for 500k  and my initial intention was to put all of my money in for the down payment, which is roughly 110k.  But after seeing how terrible the condition of the property was, I've been thinking about putting just 5 percent down to buy it and spending the rest of my 75-85k towards a new construction loan to build a fourplex, if the city allows me to rezone for R4.  But I am not sure how it all works and whether I'd qualify for it after taking on that first mortgage. Any help with this would be greatly appreciated!

Thanks!

[David Eiges]

Again, I happened to be literally looking into this today. Contacted a mortgage broker and she worked with a program called a Homestyle Renovation mortgage. For her company, they would fund a primary residence duplex, and would require 15% down relative to the ARV. The program would allow the construction funds to be accessed for 6 months following purchase. I believe different lenders may have different programs available that may allow construction loans on 4-plex or conversions. Check out FHA 203k loan