FHA 203K loans or Hard Money

[Derrell Grant]

Are 203k loans good for fix and flip?

[Caleb Jordan]

Originally posted by @Derrell Grant:

Are 203k loans good for fix and flip?

 As said homestyle loan is a conventional rehab loan for investors. I believe you can get 15% down, but not sure though.

Homestyle vs HML

Homestyle will take longer to close, 30days, probably more since it is more involved than a traditional loan. contractors may have to do paperwork and be approved lender.

Interest will be much cheaper than hard money, closing costs will be less but much more red tape.

A HML can hypothetically give you 100% financing on purchase and rehab, but more likely 10% to 20% downpayment from you is realistic.

They will usually close in a week or so. you probably will just need to submit your rehab plans to lenders. In contrast to homestyle loan,  contractors probably wont have to sign paperwork or be vetted by lender. So it is faster and simpler. Lenders fees and rates will be much higher though. 

And you will LLC to get hard money loan.