FHA financing and rehab properties

[Matthew Metros]

I'm looking to do some sort of rehab on my first MF to increase rents and/or lower operating costs. I am planning on using owner occupied FHA financing. In talks with the lender, they said that rehab properties do not work with FHA.

My question for the community is around how to execute on my rehab strategy while also getting preferential owner occupied financing terms. (I.e. low down payment, low interest rates, and so on...)

[Timothy Maloney]

A 203k loan seems right up your alley.   Typically 5% or less down and they cover the cost of the rehab.    There are limitations though...    1. You must use approved contractors   2.  You must do whatever work the lender decides  3.  You must live in the property XX number of years.   

It is a great way to get started but be careful to follow their rules.

Good luck!