Hard Money Lenders and Primary Residence Rental

[Brandon Heath]

Hello BP,

I am just trying to get a better understanding of how a HML could potentially help my attempt at a "Hard money Fix, Rent and Refi".

I've noticed that a lot of HML state that they do not loan on Primary Residence rentals. I am curious about how this works in regards to a FHA loan for the refi. Would I have to wait until the refi was completed in order to move into the property making it my primary residence?

I am extremely ignorant  this topic so any and all info would be great. I am still reading through what I could bring up by searching bp. 

Additional info: I imagine some questions may come up so Ill try and cover it all here to provide you with a better picture.

I plan to get pre-approved for an FHA loan in 3-4 months.

I have been building some relationships locally with some wholesalers. It seems that no one like to try and wholesale to anyone needing bank financing. It was suggested that I look into HML so that I could quickly jump on a deal once one shows up. And that's why I started my research tonight.

[Jon Holdman]

Residential loans are heavily regulated. Hard money loans are generally commercial loans and are not as heavily regulated. That's why HML's won't let you move in. They're not in the business of making residential loans.

For an FHA loan, you need to find a very nice house. Their inspections are very stringent. You might investigate an FHA 203(k) rehab loan. All FHA loans are intended for people buyers who are going to live in the house, not investors. You may be able to buy with FHA, live there a while and then rent it out. But its not a direct path to acquire rentals.