Ryan, Home Owner in Greenfield, WI

I'm looking to buy a HomePath property, and noticed the very limited lenders for the renovation type - who's worked with them, and

Asked by Ryan, Greenfield, WI Mon Feb 6, 2012

who's the best? Home would need a tear-out and replacement of all carpeting (~1000sq/ft) and I'm looking to use it for adding a deck to the back, as well as a privacy fence around the back yard. There's plumbing for a bathroom in the basement, and would like to also use funds to finish that (giving me a 3 bed, 2.75 bath home)

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Ryan

Why many do homepath but few do homepath renovation? Its the the repair escrow and the way fannie mae requires lenders to hold the risk and loan, also have cut draw checks to builders ect. Enough with the tech stuff.

We have had a really good service with PrimeLending on these, very reasonable with draws and they manage their own escrow accounts so money is need at closing table to get products ordered.
0 votes Thank Flag Link Wed Feb 8, 2012
Ryan,

My experience with renovation financing is limited but I'll share what I can. My buyer used Wells Fargo...it was their own re-hab loan similar to the home path in that all renovations were wrapped into the loan. The first downside was that the lender needed 3 months to close the loan....far more than a typical closing (30-45 days). The lender needed all bids in from contractors which had to be submitted with the loan package before underwriting. The appraiser then had to factor in the renovations when appraising the home which delayed things further. We ended up not closing as we needed to extend our original closing date which the sellers were not willing to do....they got tired of the delays and eventually found another buyer.

Other factors to consider...lender will most likely not allow you the buyer to do the actual yourself work unless you are a licensed contractor in whatever it is you want to do. I'm sure there are exceptions to the rule but when you deviate from the norm it usually means more time is needed to close.

On paper these loans are great ideas but just expect additional time and a few bumps in the road in getting things together.
0 votes Thank Flag Link Mon Feb 6, 2012
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