Renovation Loans?

[Anonymous]

My husband will be inheriting a house on 55+ acres of land in a small rural town. It's an older 70's or 80's style house that needs a lot of updating, plus we'd like to add a second floor addition, which I know could run anywhere from $100k-200k. I have no idea the house or land value. When looking up similar acreage in the area, the land (based on acreage) alone was selling for $400k+ The house is probably worth around $100k and we'd have no mortgage.

What kind of loan could we get and what requirements are there? Are interest rates higher? What about down payment, income/debt ratios, credit scores etc.?

Thanks!

[strive2010]

I dont know if your situation would qualify for a FHA 203k loan, but I am closing on one, and the requirements are the same as FHA. 3.5% down payment, and the same ratios, and credit requirements as regular FHA loans. The loan allows you to purchase, and includes the escrow amount for the renovations that are available in draw disbursements. It was a very long process but can be well worth it in the end when everything comes together. I went under contract in November 2010 and just now recieved the clear to close at the end of Jan 2011, so if this 203k loan was something that would fit your scenario you would have to be very patient.