Down payment

[Aaron Barrett]

I am looking at purchasing a property that is a tri-plex to buy and hold. It is listed at $31k. I plan on offering $25k although it will take approx. $45k in improvements before it is move in ready. Will my 20% down payment for financing only be based on the sale price of the house or improvements as well?

[Carrianne Mucho]

@Bryan O. & @Aaron Barrett -  a 203k is for a primary residence only.  If this is an investment property, @Stephanie Medellin made a good suggestion with FNMA Homestyle which is a renovation loan that can be used for investment properties.  Generally, it will be challenging to get a mortgage for less than $40,000-$50,000 as there are certain fixed costs that would make it unprofitable for a lender if the loan amount was less than that.  From a borrower's standpoint, there are also fixed costs such as appraisal and title fees that reduce the practicality of a smaller loan amount.