Houston rehab loans are available for a number of purposes, including renovations and acquisitions. The great thing about these types of loans is that they are structured for various reasons. In other words, they can be used not only to buy a house, but to remodel it completely, or make minor improvements. Read on to learn more about how rehab loans work in Houston and beyond.
Houston rehab loans are generally available in three different types. All are structured by the federal government, and funding is made possible through various lenders, including banks and credit unions. Here are the three most common forms of rehab loans you’ll find:
1.FHA 203k loan. This is the best option for someone who wants to purchase a primary residence and wants to fix it up. This loan can be used to buy a house and make minor or major changes. It requires a credit score between 500 and 580, with a down payment of 10 percent.
2.The Fannie Mae HomeStyle loan. Just like the loan listed above, this form of financing can be used to purchase a primary residence. But, it can also be used to purchase a second home, or an investment property to rent or flip. It requires a minimum credit score of 620, with a down payment usually ranging from 3 to 5 percent.
3.The Freddie Mac CHOICERenovation loan. This type of loan is usually reserved only for renovation purposes because it is intended for what’s known as permanent fixtures. Examples would be adding a master bedroom suite or an extra bathroom.