Incidentally, forget a hard money loan. They're for short periods of time (i.e., 6 months), they're outrageously expensive (in the range of 5 points and 15% interest), they only cover about 65% of the value of the property, and they're not made to people who plan on living in the property.
On the other hand, private funds are a possibility. That'll be expensive, though. There's more variability with private lenders, but it might be in the 3 points/12% range. And it won't be a 30-year loan. It's all negotiable, but perhaps 3-5 years.
A personal loan from a bank or credit union might be your best choice if you don't have friends or family who'll lend you the money.
Hope that helps.
I would recommend either finding a home that the owner will finance, or borrow money from a private lender or relative.
A couple other possibilities are:
1. Find a "work for equity home", This is where the house needs work but the owner holds the small mortgage while you repair it. Once you have it repaired and the value has increased to $40K - $50K you would refinance at a lower rate.
2. Consider a mobile home. They are typically available in very good condition in the $20K range and financing is often available for new mobile homes. By the way, some of these are VERY nice
I was just speaking about this to one of NY mortgage brokers. The problem is Banks are not allowed to charge you enough to make up the cost of putting together a loan that small. They are limited to the percentage amount charged on loans . This is in place to protect borrowers from being taken advantage of.
I am being told some credit unions are lending as little as $25000 but have not confirmed it yet.
In the meantime I believe you are left with borrowing the money from private and hard money lenders. You may also consider offering to buy the home with Seller Financing.
Let me know if I can help in any way. I hope this helps.
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