Milwaukee Renovation loans

[Andrew J.]

Hello all Milwaukee Bigger Pocket members, I hope the last meet up went well as I was unable to attend.

My attention has recently been focused on a REO property that needs approximately 20k in roofing, gutters, concrete and foundation work.

I am not eligible for a 203k FHA loan as my current property is financed under a 30 year FHA. I have made some contacts to local lenders who offer renovation loans, but was wondering if any other Milwaukee members had any experience with renovation loans in Milwaukee.

Also may need some good references moving forward with foundation repair contractors.

Thanks for the help!

[Nicole Pettis]

@Andrew J. Hello! Yes, we missed you at the last meeting:)

Currently my husband and I are closing on our house this friday with a FHA/203k loan and from my research it can only be used for owner/occupant. So unless this place was going to be your primary residence you wouldn't be able to use the 203k rehab loan.

However Fannie Mae offers a Homepath Reno loan for their properties and if the property has gone passed the time allotted for owner/occupant, then investors can purchase and use the reno loan.

As for the 203k loans, they are two kinds:

• The streamline which goes up to $35k(basic code and update work)

• The standard which goes from $35k and up(this is for foundation work and such)

Streamline is quicker to close, only 45 days compared to 60 with the standard With a standard 203k you need an FHA inspector, to whereas a streamline, you can use any inspector. However both require everything that needs to be up to code fixed first, cosmetic later. Also the amount that you borrow is still dependent on your credit and debt to income ratio, also they will only lend up to 80% of LTV(I believe...not 100% on this one)

Also, there are restrictions as to what each loan covers. Streamline won't cover fencing, landscaping, foundation work, moving of walls and such. Standard covers just about everything.

And with both loans you have to hire a General Contractor. No if, and's or but's about it and they have to be licensed in your state. Also, they have to understand the requirements/standards of the 203k loan.

We are working with @Zechariah Evans and his father in law on our project and they have been wonderful to work with. So if anyone needs a contractor, please check them out.

So there you go a little info on the 203k loan process. Overall it has been a little bit of work, but in the end it will be worth it! I will post photos of our progress and I will get the Milwaukee Local Meetup Blog up as well.

Have a great night!!