Purchase and Construction Loan
Purchase a property and finance renovation cost in one loan. This is ideal for fixer properties that need remodeling. The future after-repaired-value is considered.The transaction closes like a regular sale. The renovation is a separate project between the borrower, contractor, and bank.
|Credit Score:||620 minimum|
|Property type:||1-4 units, Condo, PUD|
|Down Payment:||3.5% minimum|
|Loan to Value:||96.5% CLTV: 96.5% (based on after-repaired value)|
|Gifts Funds:||Allowed. No minimum buyer contribution|
|Closing Cost:||Seller and/or lender can pay up to 6%|
|Debt ratio:||43% with compensating factors 46/56%|
- Condos must be FHA approved
- Bankruptcy 2 yrs, Foreclosure 3 yrs, Short Sale
- Cannot convert SFR to 2 Units.
- Luxury items not allowed ( new pool, sauna, etc. )
- Renovation must be performed by licensed contractor
- Minimum $5,000. No Maximum – must stay under loan limit
- Up to 6 mos. reserve payments to assist during remodeling
- Unpermitted additions will not be given value
- First time buyer not required. Must be primary residence.
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