Re: Rehab Mortgage Loan?
09-30-2012 10:04 AM
^^^The poster above is correct - it's called an FHA 203k loan. There may be other rehab loans but I don't know what they are called.
However, the process for a rehab loan is slightly different here - you can borrow more than $30k but the process is streamlined if the loan is under $30k. You need to use contractors (not handymen) to do the work and they have to provide their bids and their contracts in advance. So there is no overage because the lender will advance 50% up front for the contract to do the work after you close and the other 50% when everyone has completed the job AND the appraiser has gone back out to check the work to make sure it is completed. Use a lender that does a lot of these - because if you don't the process is a nightmare.