Say you buy a foreclosed home in bad condition listed at say $20,000. Can you get a mortgage for say $45,000 dollars to cover mold removal, rewiring, just general improvements? I’ve tried to find information on-line and someone suggested an FHA streamlined loan but after reading more about the streamlined loan it doesn’t seem like that’s what a streamlined loan is really for.
Yes, they are called 203K loans. If you purchase a house for $100,000 and it needs $25,000 worth of work you can get the loan for $125,000. BUT, the house will need to appraise for $125,000, the appraiser will appraise the house at the "repaired" amount instead of the as-is amount. They take a little longer and you will need to have a couple of bids from contractors (I have never seen anyone get a loan based on doing the work themselves, but it may be possible)
A lot of lenders don’t like doing them because of the added paperwork but check around, you’ll find one that will do it, make sure they have done them before.
Good Luck!!
No, you would have to pay cash or get a hard money lender at 14%-17% interest and then you would have to do each faze of the project and take a draw when completed. Conventional and FHA loans require the home to be in average condition. Lenders do not just give out $25,000 to anyone thinking they can redo a home. This home has some big issues.
References :
Certified appraiser.
Yes, they are called 203K loans. If you purchase a house for $100,000 and it needs $25,000 worth of work you can get the loan for $125,000. BUT, the house will need to appraise for $125,000, the appraiser will appraise the house at the "repaired" amount instead of the as-is amount. They take a little longer and you will need to have a couple of bids from contractors (I have never seen anyone get a loan based on doing the work themselves, but it may be possible)
A lot of lenders don’t like doing them because of the added paperwork but check around, you’ll find one that will do it, make sure they have done them before.
Good Luck!!
References :
Realtor