The rehab loan is an amazing product because it can help you to purchase a home with a minimal down payment and it finances the construction aspect of your renovation projects. With this loan, you don’t need to finance the purchase and the renovation separately.
With that in mind, today I brought in Matt Mieras from CMG Financial to talk about the different loan products that are currently available in the market.
There are two common types of renovation loan programs: conventional renovation financing and FHA financing. Both programs have what is called streamline renovation financing, which covers minimal repair work that costs $35,000 or less. Suppose, for example, that you wanted to buy a house and then update the kitchen and bathrooms—both of those things are acceptable under the terms of that loan.
They also have a full renovation loan program for projects that cost $35,000 or more. This could include mother-in-law suites, pool installation, foundation repairs, roof replacement, and so on.
That said, the down payment requirements do vary based on the loan program. The FHA renovation financing requires 3.5%, where the conventional loan requires 5%, so they’re both very affordable.
These programs can serve different purposes. You could use it to buy a house, renovate it, and make it your own custom property, or if you already live there, you could use it to upgrade some of the more outdated features. These are genuinely fantastic programs.
If you’d like more information on renovation loans or if you’re looking for a good investment in general, feel free to reach out to me. We can give you more details about what good opportunities are out there in the market that would allow you to take advantage of this loan product.