Texas Rehab Loans
Texas rehab loans come in several different forms. (Actually, there are three major types, but these can be broken down into different structures, which serve different purposes, expanding the number of options of residential rehabilitation home loans.) The great thing about rehab loans in Texas, and other states across the country, is the fact that they allow people to get into a residence for less and customize it to their liking. Additionally, some rehab loans in Texas allow investors to completely remodel an investment property and flip it or rent it out. Read on to learn more about Texas rehab loans and what you need to know.
Texas rehab loans, as stated above, are usually offered through one of three programs, there’s one offered by the Federal housing administration or FHA, another by Fannie Mae, and yet another via Freddie Mac. While all of them are for rehabilitation purchases at large, they do differ in their terms and conditions, meaning they don’t apply to every situation. For instance, some can only be used on a primary residence, while others can be used to remodel a second home or investment property. Also, these rehab loans may or may not allow for the purchase of a primary residence and remodeling of said property, while others are strictly for makeovers only. So, you’ll have to do your homework in order to find the right fit. Here are the three major types of rehab loans you’ll find in Texas and beyond:
- 1.The FHA 203k loan.
- 2.The Fannie Mae HomeStyle loan.
- 3.The Freddie Mac CHOICERenovation loan.
While all three renovation loans are similar, covering major and minor makeovers alike, they do serve different purposes. For example, the FHA 203A loan requires a credit score ranging from 500 to 580, with a down payment between 3.5percent and 10 percent, and can only be used on primary residences.
However, the Fannie Mae HomeStyle loan may be used to purchase a primary residence, rental property, or investment property, and requires a credit score of 620, with a down payment ranging from 3 to 5 percent. Meanwhile, the Freddie Mac CHOICERenovation loan is intended for improvements that are permanently affixed to the property, which makes it broader, and could be used for something like putting in a swimming pool.
As you can plainly see, there are different types of Texas rehab loans to choose from. Of course, you’ll need to speak with a loan specialist in order to determine the right one for your particular situation.