Dallas rehab loans provide essential financing to first-time homebuyers, property investors, and experienced home buyers for necessary remodeling and repair when buying a new residential property. While there are several types of renovation loans, three of the most common are backed by the federal government, however, many more are available through regional Banks and credit unions. Read on to learn more about Dallas rehab loans and what you need to know.
Dallas rehab loans are a great way to be able to make repairs and upgrades to a home without having to incur the costs upfront. These loans generally work in the way as residential mortgages do and like a residential home loan, have certain stipulations and requirements.
For instance, the FHA 203k loan is ideal for first-time homebuyers or people selling their property and moving into another that needs remodeling. At this time, the FHA 203k loan program requires a minimum credit score of 500, with a 10% down payment. Or, a credit score of 580, with a 3.5% down payment. Plus, the renovation must begin immediately after closing, and funds cannot be used for luxury items, such as a swimming pool. Additionally, this loan is only available for primary residences and not for investment properties or second homes.
The Fannie Mae HomeStyle loan works much like the previous one but can be used for a vacation or second home, and investment property. Meanwhile, the CHOICE Renovation loan by Freddie Mac is for updating a house that is out of date. So, it is most suitable for first-time buyers who find properties that need some TLC.