Rehab loans not available during COVID

[Joe Villari]

Hi,

My partner and I recently went under contract on a rehab property. Prior to making an offer, we had discussed financing with a lender to get a rehab to perm loan. Once we went under contract, the same lender confirmed he still could provide a rehab loan but we would have to pay an additional 4% for the loan option that would not be applied to equity. It would technically be an unrecoverable 4% to have an option for financing the project. With the recent developments with COVID more lenders are shying away from these types of programs.

Is anyone experiencing the same challenges? What alternatives do we have for financing? Are there any recommendations that anyone can provide?