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.
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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% |
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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.
This page contains program highlights only. See sidebar links for further information and details.