Financing in Adams County>Question Details

Harry, Home Buyer in Littlestown, PA

I'd like to buy a home for my brother to live in (his credit is poor) and lease it to him. What kind of loan rate could i get - investment?

Asked by Harry, Littlestown, PA Sat Jul 30, 2011

property? The houses in my 'comfort' price range are all fixer-uppers. Is there a loan type that I could get with a low interest rate (My credit score is above 750) that could also include renovation costs?

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Yes there is the Fannie Mae HomeStyle Renovation loan which will finance primary residences, second homes, and investment properties.

https://www.efanniemae.com/sf/mortgageproducts/pdf/hsrenofacts.pdf (there is a link to the Power Point Presentation which you'll want to watch) which does 75% financing on investment properties. So you need to put down 25% based on the the (“as-is” purchase price + renovation costs + contingency costs (if financed) + eligible soft costs + interest reserve).

Interest rates will be about .25% higher than if you purchased with a mortgage program that doesn't do renovation - but still you are looking in the low 5's on a 30-year fixed with excellent credit.

There is also the Fannie Mae HomePath Renovation loan program, but it's only for properties at http://www.homepath.com/ - same 25% down payment is required.
1 vote Thank Flag Link Sat Jul 30, 2011
Assuming you qualify, based on your debt loads, most of my investors are currently paying in the 6.0% to 6.5% range.

Jack Gillis, M.B.A., J.D.
Jack Gillis Realty Advisors
Nathan Grace Real Estate, Broker
5619 Dyer Street | Suite 100
Dallas, TX 75206
Cell: 214.718.4910
Email: Jack@JackGillisRealty.com
1 vote Thank Flag Link Sat Jul 30, 2011
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