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Home Rehabilitation Loan                                                                                                                                           

Home rehabilitation loan products are flexible. Homeowners and buyers need a better way to finance rehabilitation of their existing home or the home they are purchasing. Before home rehabilitation loan programs, homeowners or purchasers wishing to finance rehabilitation had few alternatives. These were 1) Pay for improvements in cash. 2) Do a cash-out refinance based on the current value of the home. 3) Take out an equity line.These place the burden of funding the rehabilitation on the homeowner who will not be reimbursed until after the loan closes. Email home rehabilitation loan questions

I am a home rehabilitation loan mortgage broker and represent 21 of the largest construction and rehabilitation lenders. As a broker, I work for you, my client and not the lender, taking time to understand your situation and placing your home rehabilitation loan with the lender whose loan matches your needs. I give you unbiased advice and support throughout the process. Construction and rehabilitation lending is a specialized area and most brokers do not have the experience to guide you through this complex process. I have given you basic information here but please do call to discuss your specific project. At the fundamental level, lenders offer two types of product characterized by how they base interest rates during the construction phase. I describe them “One Step” and “Two Step”

  • Home Rehabilitation Loan Single Rate. "One Step" program which protects you against increasing rates and extended lock fees. Interest only fixed rate during construction and modifies into a permanent loan after construction.

  • Home Rehabilitation Loan Prime Rate Based. "Two Step" program allows you to borrow up to 95% of your total cost for a Principal Residence and up to 90% on a Vacation Home. Based on the Prime Rate  during the construction period with interest only collected on funds disbursed. Allows a 12 month construction phase. 

Home rehabilitation loan programs are a variation of the "One Time Close" construction/perm product. The major advantage of a rehabilitation loan is that we lend against the finished or "as completed" value of the property rather than the current value of your home

Home rehabilitation loan programs have two uses:

If you are purchasing a property that would be perfect if it had....... The first disbursement acquires the property and subsequent disbursements occur at predetermined points in the construction process. After construction, the loan modifies into the permanent loan of choice saving the cost of a second closing.

If you are rehabbing an existing property because it would be perfect if it had.... The first disbursement refinances any liens against the property and advances the contractor any up front costs. Subsequent disbursements and modification follow the above process.

Under the above programs, you may act as your own General Contractor if the costs are less than $50,000 and the "footprint" is not changed. If your project is large or will change the foundation you do need a fixed price contract with a licensed contractor.

I have included a list of the documentation needed to process your Rehabilitation Loan , a section on Frequently Asked Questions, a section on rehabilitation loan draw schedules, and information on rehabilitation loan fees. They may require the use of a contractor. I have a section on contractor requirements and contracts.

NEW! A newsletter giving a detailed description of rehabilitation loan available by email.

One final but important note. These are complex and are a specialized area of mortgage lending. I have many years of experience in home rehabilitation loans and in most years will close in excess of $3,000,000 of these loans. As an experienced mortgage broker, I have access to most programs available today and will research the market for the program which makes the most sense for you. I prefer to analyze your goals and financial situation before I recommend a program but I will always make sure you clearly understand the options available to you. I stay with my clients from the beginning to the end of the project. If there is an issue with the lender, I will intercede on your behalf. I work for you, not the lender.

As a Certified Mortgage Planning Specialist, I offer an analysis of your situation today can make suggestions on how small changes in how your debt is structured today can have a life changing effect in the years to come.  Read more about this free, no obligation service.

Home rehabilitation loan Prequalify for your Home Rehabilitation Loan.

 

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Extensive consumer information on construction,remodeling, first time homebuyer,and no documentation mortgages.