Purchase and Rehabilitate 1-4 Units

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
Occupancy: Primary residence
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%


Additional Notes:

  • 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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