Conventional renovation loan

[Davidson Francois]

hey BP family, can anyone share some pros VS Cons on a conventional renovation loan? this loan option just seems to good to be true

[Alex Johnson]

@Davidson Francois I did one last summer (HomeStyle loan). It's a great program for the right situation. 

Pros - finance all of the rehab costs into the mortgage. You can put 5% down for owner-occs (my deal was a purchase price of $170k, $35k rehab, all in for about $8k on my end and it just appraised for $290k)

Cons - the process can be lengthy so you need to have a contractor that you know and trust that is ok going along for the ride. Draws come from the lender and they have to send someone out to do an inspection and verify the work is done for each draw. Then they mail the check. Your contractor needs to be comfortable knowing that there can be some turnaround time between the draw request and actually receiving the check.