Home Buying in Chicago>Question Details

Spice, Home Buyer in Chicago, IL

Another friends owns a property in the bronzeville area outright that needs a total renovation, but due to a foreclosure on his credit he is having

Asked by Spice, Chicago, IL Tue Nov 13, 2012

challenges securing a construction loan. Are there any alternatives out there that will allow him to fix the house up and live there ?

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Northpointe Bank is able to offer your friend a cash out portfolio loan that may help him with his project. Please pass along my contact information to him and I will get to work on his refinance! Direct dial is 866.901.3570 and email is julieh@northpointe.com
1 vote Thank Flag Link Tue Nov 13, 2012
Does he have the CASH? ...If yes, the pay for the rehab on his own

If No, borrow the money from friends and family and pay them back, else try a Hard Money lender.
0 votes Thank Flag Link Tue Nov 13, 2012
He could get a "hard money" loan, but expect high fees and 20% interest. If he is actively rebuilding his credit, maybe borrow from friends and family to do the work now and pay them back in a few years with a cash out refi.

Best of luck,

Ivan Sagel
0 votes Thank Flag Link Tue Nov 13, 2012
He needs to find a hard money lender, someone who lend the funds, and expect to pay a sizable penalty in terms of interest, because his credit history shows he is not a good risk. The reality may be that he should sell the building and find other options for where to live. His primary concern needs to be repairing his credit instead of trying to work around it.
0 votes Thank Flag Link Tue Nov 13, 2012

If he's re-established good credit and it's been at least three years since the foreclosure has been completed, your friend may qualify for an FHA 203k renovation loan.

Matt Bukovy
Senior Mortgage Consultant
Web Reference: http://www.mattbukovy.com
0 votes Thank Flag Link Tue Nov 13, 2012
He can find someone to loan him the cash. Construction loans are very tough in this market and darn near impossible for someone with a recent foreclosure.
0 votes Thank Flag Link Tue Nov 13, 2012
Can he finance it with cash over the course of a year or two and just rehab one unit at a time? If not, he/she may be able to get private money lending (hard money). This person could also transfer ownership to a friend or family member who has good credit.
0 votes Thank Flag Link Tue Nov 13, 2012
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