Need $10K Cash Back to Buyer for Repairs

bigdyce45 · Joined: 11 Jul 2006 Posts: 25

I'm looking for a lender to do a residential loan for $102K, stated, and allow the buyer to get $10K cut back to him at closing for repairs and what not. In case you're wondering; it's a pre-forclosure.

I've heard a few LO's mention this before, I hope I worded it right. Any help would be appreciated. Thanx.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Most likely if they're putting money into repairs etc, it's going to have to be held in an escrow account, and you're usually going to have to put in a healthy sum above the amount you want.

My advice? Have your borrower buy the house $10k cheaper, do a conventional renovation loan (will require a down payment) and have the loan cover all the things they *want* to do, rather than just the things they *have* to do.

Besides the fact that some of the repairs may be things that you need to have fixed before you can fund the loan if it's a traditional mortgage. Renovation will allow you to get by a lot of those restrictions.

bigdyce45 · Joined: 11 Jul 2006 Posts: 25

Thanks Haplo.

Can anyone recommend a good company for renovation loans?

chow · Posted: Fri Sep 08, 2006 12:47 am Post subject:

I haven't a clue. :wink:

oh excuse me-

my evil twin was supposed to say that.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

That guy right above your previous post just happens to be a renovation specialist for Wells Fargo. I imagine he knows a thing or two about them, and you could probably call him to find out.

chow · Posted: Fri Sep 08, 2006 9:21 am Post subject:

Dang it, Haplo ! Did you have to tell him that guy does those types of loans? :lol:

bigdyce45 · Joined: 11 Jul 2006 Posts: 25

"What guy?" :wink:

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

<--

The best in the industry of course.

Chow, I think I'm going to need to make a post about renovation in the near future. I keep hearing 'oh, you mean a home equity loan?'

NO! Haha. I mean a renovation loan.

Look forward to that folks, it'll probably be in the next week and a hafl (as soon as I get caught up from having my computer blow up, having 2 days of training, and having a short week. Yay!)

chow · Posted: Sat Sep 09, 2006 8:49 am Post subject:

bigdyce45 wrote: "What guy?" :wink:

Be very careful with that guy. He's dangerous with a computer. He's blown out 3 in less than 2 months!

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

No no, only two :P

bigdyce45 · Joined: 11 Jul 2006 Posts: 25

Haplo -

I know it's been a while. The seller for the deal I mentioned above pulled it off of the table for a while. But now it's back on. I just had one question: Is it possible to go stated on one of those reno loans? And if so, what are the requirements?

Thanx in advance.

I'll probably be calling you first thing tomorrow.

Greg Phillips · Joined: 13 Dec 2005 Posts: 123 Location: Chillicothe, Ohio

What is the minimum amount the renovations can be?

Is it considered a construction lending program(s)? (Construction/Rehab Division of Wells?)

What states are you clear to lend in? I am just thinking of referrals for you. I do not tackle construction much myself. I know it and will if I have too but the time investment can be much greater than refi/purchase.

bigdyce45 · Joined: 11 Jul 2006 Posts: 25

One more thing:

Does my client have to purchase the home and then apply for the renovation loan?

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

If you need a stated loan, then that is a construction to perm loan which has 2 closings. Most renovation loans however are a single close transaction. Depending on the product there is no 'minimum' necessarily, but it really doesn't make sense to do it in many cases unless you're talking several thousand dollars. The minimum on one part of the FHA is $5,000.

So to answer your question bigdyce, no. The loan they would apply for would be the purchase & renovate loan, and the extra money would be set aside.

If you're a broker, then I can find out who you'd want to talk to in order to do the loan. Either way, feel free to call me tomorrow and we'll get you hooked up.

Greg, it's similar to the construction, but it's seperate. They're kind of integrating them in some ways, but it's funny because the renovation side does 2/3 of the construction loan volume right now. (New and existing.) So they're pushing hard to get more of us to do constrcution ;)

I lend from Hawaii to Maine, so no problems there. Depending on the circumstances I may want to provide a local rep the referral just because in some situations it can definitely help to have local knowledge, but usually it's no big deal either way.

bigdyce45 · Joined: 11 Jul 2006 Posts: 25

Quote: The loan they would apply for would be the purchase & renovate loan, and the extra money would be set aside.

So he would have to get the purchase loan and renovation loan through the same company?

I thought you meant buy the house for $10K cheaper than we had planned, and get a renovation loan for the rest. Because he is currently approved for a stated 80/20 right now, he won't want to apply for a full doc loan with another company.

I am understanding this correctly?

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