I have a duplex that I plan on buying and renting out. I expect to get it for 99,000. I have the required

Asked by Travis, Columbia, SC Sun Mar 9, 2008

10% to put down, but I need a loan that will give me 10,000 for repairs that are needed. I was told that I could get a line of credit or maybe a construction perm loan. What exactly do these two loans entail, or how exactly do they work?? I am kind of new to this, so I want to make absolutely sure that I pick the best of possible loans. Maybe there is a better way to do this, or some other types of loans?

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Fri Nov 14, 2008
Ok, I know this is many months old but I'll help you with your answers.

First, in the spirit of full disclosure, I'm a Renovation Specialist with Wells Fargo.

The product you're looking for can't be used with a 203K. A 203K is an OWNER OCCUPIED FHA Renovation/Rehabilitation loan that typically, includes both the existing/new lien and the rehab costs. This program has similar requirements to that of a normal FHA loan. The requirements are a bit more restrictive than normal FHA loans due to increased risk (a loan is being given on work that hasn't been done yet, makes sense, no?). Rehab can include almost everything minus structural/foundation repairs.

Currently, 3% is the required borrower investment but in January, it will be 3.5%. For those who don't know, this is as a result of the Housing and Recovery Act of 2008 where sweeping FHA changes occured.

Continuing, the 3% or 3.5% investment, at least on the Wells Fargo product (I can't speak for every other lender as they can package the loan differently) is based on the acquisition + rehab costs.

In this particular instance, we have a product that INVESTORS can use (this seems to be the answer to what the poster is looking for). We used to allow 90% financing on a non-owner investment rehab loan but the MI companies won't insure those loans any longer so we're capped at 80% now (market classifications could effect max financing depending on your area). This product works exactly like the 203K except it requires a larger down payment.

As far as pricing, costs, credit scores, etc, feel free to contact me.
Web Reference:  http://robweber.com
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Scott Godzyk, Agent, Manchester, NH
Fri Nov 14, 2008
Your best bet is teh fha-203k loan that will allow you to purchase with 3% down and include the money needed to fix up without having to go through a refinance later on with an added cost. The best way to tell is to meet with a local and trusted mortgage broker, they can look at your financials and tell you what programs you qualify for. Good Luck with your purchase.
Web Reference:  http://www.ScottSellsNH.com
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Morris Lyles, Agent, Columbia, SC
Fri Nov 14, 2008
You might also want to look at the FHA 203k type loans- I dont know if they will qualify for non-owner occupied loans, but it is worth a shot.
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David Patter…, , 29229
Sun Mar 9, 2008

I'll refer you to two financing sources. Brian Foxworth is affiliated with First Covenant Mortgage. To receive a FREE Consultation, please contact Brian at (803) 446-3270 or by email: Brian@FirstCovenantMortgage.com.

Also....You can give Danny Thornton a call. He is with Home America Mortgage, INC. You can reach Danny at (770) 998-1964.

I wish you much success in your real estate endeavors.


David A. Patterson, Broker CRS ABR
Russell & Jeffcoat Realtors, Inc.
5219 N. Trenholm Road
Columbia, SC 29206
(803) 960-5231

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