HomeStyle Renovation Loan

[Alexis Franklin]

In January, I bought a SFR in south Jersey that needs some significant rehab. My plan was to hold it as a rental. I bought the house cash and was going to use personal funds and hard money for the rehab. The pandemic hit before I secured the hard money loan so I started exploring other financing options- I didn't want to be stuck paying for a hard money loan while construction was shutdown. Also, the criteria for hard money got more stringent.

A broker told me about HomeStyle loans which seemed like a viable option. (If you're not familiar with Homestyle loans, they're similar to hard money in that you have to get a SOW and the money is disbursed to the contractor through draws. They're very similar to 203k but can be used on investment properties). Over the last 90 days, I have been working with this broker to get the SOW and to submit all of the necessary documents. A few days ago the broker told me that all investors have "dropped out of the market for investment rehab loans." 

Has anyone else run into this issue? Any thoughts on alternative financing? The house needs about 60k total in rehab and this loan amount is too small for many of the lenders I've spoken to. I've also considered delayed financing but the place is currently not habitable. Should I just get a personal loan and refi out once I get a tenant? 

Any advice is appreciated.