I Can Buy THIS for $100 Down??

Investor Renovation Loans

2011 and beyond presents an amazing opportunity for real estate investors. Whether you are buy and hold or fix and flip, whether you are in Alabama, Georgia, Florida, South Carolina or Tennessee – it doesn’t matter, the market is RIPE!

If you are a cash investor then have at it, the world is yours. If you need mortgage financing then you need to know your options, the guidelines, the pitfalls and the benefits of going that route.

In some cases you may have the cash to buy outright, but it may be more beneficial to get a mortgage. After all, in this market you will find multiple investment opportunities, why not leverage those opportunities?

To get the most out of this fantastic, once in a lifetime market, financing may be your best option. What are your Investor Renovation Loan options?

Jonathan, I thought banks weren’t lending to real estate investors? Not true, banks are lending to you, but be prepared to work for it. Investors, just like owner occupants, need to understand the 2005 cakewalk days are OVER.

Getting a Mortgage in 2011 is TEDIOUS

If you aren’t prepared for some documentation and a little work then stop reading and step back into your cash / hard money world. This post isn’t for you.

So, what are the investor loan options these days? Let’s go over the renovation loan options. BUT FIRST, let’s go ahead and get one option out of the way. I get calls everyday about this. What is it?

FHA 203K Loans

FHA 203K loans are for owner occupants ONLY. Period. Don’t call me and ask if you can flip a property with a 203K. Don’t think you can trick the system either.Mortgage lenders and underwriters are very sensitive to the FHA occupancy guidelines.

You MIGHT be able to get away with it once, but chances are we’re going to catch it and you are going to waste your earnest money, home inspection money and whatever other money you have invested. Let me repeat, 203K loans are for OWNER OCCUPANTS ONLY!

Hold on though, that doesn’t mean that investors don’t have a use for the product. Investors can buy a property wholesale, market it 203K and sell it to an owner occupant.

BEWARE and understanding FHA property flipping guidelines though. I don’t have the space to go into them here, but you’re going to have to hold the property for 90+ days before you can sell it.

HomePath and HomePath Renovation Loans

If you are in the real estate market you have run across HOMEPATH properties. HomePath properties are Fannie Mae foreclosures, in order to move the homes off their book Fannie created a special loan products available ONLY on their foreclosures.

Traditional HomePath loans are straight purchase loans. Available to investors at 10% down with NO MI! Yep, only 10% down and no mortgage insurance. I want to mention something else, but it needs emphasis

Traditional HOMEPATH Loans DO NOT Require an Appraisal

You save money, you save time and you avoid property condition issues that plague the foreclosure market. You can have FOUR financed properties at 10% down, after that you’ll need 25%. Other guidelines apply, talk to an experienced LO.

HomePath Renovation Loans

Some HomePath properties areeligible for HomePath Renovation loans ONLY. The listing will indicate whether the listing is available for HomePath, HomePath Renovation or both.

If the listing iseligiblefor HomePath it is automatically available for HomePath Renovation, but not vice versa. HomePath Renovation listing are NOT eligible for anything BUT the HomePath Renovation loan.

HomePath Renovation loans require a 15% down payment. MAXIMUM renovation amount is$35,000. COSMETIC renovations only. No structural renovations allowed.

HomeStyle Renovation Loans

The HomeStyle is Fannie Mae’s non property specific renovation loan. Renovations are not limited to$35,000 and structural renovations are allowed.

However, this product is HARD to find. If you have more than 4 financed properties then you are out of luck.There’s no mortgage insurance for this product so you’ll need minimum of 20% down.

Other Options

The other options don’t make me any money so I’m not interested in explaining them in much depth. You can use hard money, you can buy cash, you can use a traditional purchase loan or some fancy assignment contract or other garbage that real estate investors who are stuck in 2005 still try.

Want to Give It a GO? Click HERE and We’ll See if You’re Credit Worthy!

Looking to INVEST in commercial real estate? You need a small business loan. Check out our SBA and business loan resources!

More From 203K Mortgage Loans

• How to Write a FHA 203K Purchase Offer | 203K Loans | HomePath Renovation Mortgages – Georgia, Florida, Alabama, SC
• 10 Ways Renovation Loans Create HUGE Value | 203K Loans | HomePath Renovation Mortgages – Georgia, Florida, Alabama, SC
• 203K | HomePath | HomeStyle – Which Loan is Right for Me? | 203K Loans | HomePath Renovation Mortgages – Georgia, Florida, Alabama, SC

203K Mortgage Loans Recommends

• Fannie Mae HomePath Mortgage Loan: What Properties Are Eligible?  (Arizona Mortgage Team)
• Buy a House with Low Down, No PMI, No Appraisal? Yes! Welcome to HomePath.  (Arizona Mortgage Team)

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