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Homepath & Homestyle Renovation Loans

Posted by barbcollins (My Page) on
Fri, May 6, 11 at 7:32

Went to a seminar sponsored by a local real estate broker the other night which was about loans for investment real estate.

Kind of interesting about some of the programs, but they said that you have to have a contractor, and you can't do the work yourself.

One person hinted that maybe the contractor could pay you back.

Anybody have any experience with these programs? Is there too much red tape?


Follow-Up Postings:

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RE: Homepath & Homestyle Renovation Loans

Too many red flags. Why should a loan company tell you who to hire.Sounds like a sort of pyrmid from RE to loan to contractors. Would I do it? NO


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RE: Homepath & Homestyle Renovation Loans

It doesn't sound to me as if the lender is telling you which contractor you have to hire, just that you do have to have a contractor involved. They are not going to lend money on a home that is to be rehabbed if they have no guarantee that the funds will actually go to the rehab.


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RE: Homepath & Homestyle Renovation Loans

I don't know of anybody, lender, Realtor, or title company, who would dare to recommend a contractor these days.

The requirement to use a contractor is to prevent buyers from either trying to do the work themselves & doing it wrong or from not doing the work at all & pocketing the funds.


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RE: Homepath & Homestyle Renovation Loans

No they were not saying the name of a contractor, jut they were saying make sure "your contractor" is fully licensed and insured etc.

So in our case we will have to have enough funds to cover the rehab.

But ok, so just for the purchase of a house under Homepath or Homestyle is there a lot of red tape?

These would only be Fannie Mae foreclosures.


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RE: Homepath & Homestyle Renovation Loans

Marie-ndcal... you are both paranoid and completely wrong...

I have investor clients that use this porogram quite often. It is a legitimate loan program. It is much like a construction loan.

I have a 15 page pamphlet, (which will not copy and paste) that explains it all in laymen's talk. If you like, send me a PM and I can email it to you. After reading it, you will not have any questions on how this neat program works.


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RE: Homepath & Homestyle Renovation Loans

ncrealestateguy - I tried to send you a PM but couldn't find a link on your "My Page".

I would love to see the information you have. Do you know of any programs that benefit people in our situtation. Those that are capable of doing the work themselves. I don't see anything wrong with "Sweat Equity".

They also had a speaker who talked about self-directed IRA's but she said you can't even lift a hammer or it is a violation. No sweat equity allowed.


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RE: Homepath & Homestyle Renovation Loans

Barb, the fact is that homeowners aren't licensed and don't have a track record to back up their skills and experience. A lender would be nuts to make a renovation loan based on homeowner's enthusiasm.
There is nothing wrong with sweat equity, just don't expect a lender to finance it.


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RE: Homepath & Homestyle Renovation Loans

Barb,
What Terriks said.
My email is Mike@LakeRealty.com.
I do know of people that have gotten a credit card that has 0% interest for 12 months. Put all of your rehab costs on this card and them pay it off before the interest kicks in. It alos looks good on your credit report.


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RE: Homepath & Homestyle Renovation Loans

Terriks - Yes, I see that point of view too. In our case DH is a licensed plumber, but still would not be allowed to do any work.

So far we have just been buying and renovating with cash. Would just like to step things up a little on the next one.

ncrealestateguy - Thanks I'll email you.


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RE: Homepath & Homestyle Renovation Loans

terriks: "There is nothing wrong with sweat equity, just don't expect a lender to finance it."

Interestingly enough, they do finance sweat equity with the HUD 203K's (which are PITA's on their own)...but they require one to factor in labor cost in case you can't complete the job.


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RE: Homepath & Homestyle Renovation Loans

just talked to a lender;
you have to have a contractor.

same reason, buyer might not do it right or might not do it at all.


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