Looking for a Home Rehab loan?

If you are a real estate investor that is interested in flipping your next property, then maybe it’s time to get a Home Rehab loan. These loans will cover the cost of the under market value home and construction costs. Keep reading to learn more information about Home Rehab loans.

Check if you qualify today.

Why Consider Getting a Home Rehab Loan?

A Home Rehab Loan is a type of home improvement loan that can be used to buy a home in need of repairs.

The most common home rehab loan is known as an FHA 203(k) loan. These types of loans allow the buyer to borrow enough money to, not only cover the purchase of the home but also the cost of the renovations and repairs.

These types of loans give the buyer a chance to purchase a home in a neighborhood they otherwise could not afford to buy into or in high-demand neighborhoods where the homes don’t need as much work.

Many buyers do not consider buying a home in need of serious repairs, but maybe you should. Rehab loans give you endless possibilities to look for a home in a neighborhood you have always dreamed of living in, but know you could never afford.

Rehab Loan Information

Rehab loans do come with their own set of challenges. You must make sure you have excellent, trusted contractors to give you a quote for the repairs and that they’ll stay within budget. 

Also, you’ll need to get multiple quotes from contractors. Don’t just settle for the first quote and try to get the best deal possible.

When you go to close your Home Rehab Loan, remember: the amount of your final loan is going to cover the purchase of the home, plus the estimated cost to repair it, including all materials and the labor it takes to fix it.

Before closing the loan, you’ll need to present a written estimate of repairs from a licensed contractor. The money for the contractor will be placed in an escrow account and will be released in a series of draws to as they complete their work.

There are two types of FHA 203(k) loans:
The Streamline 203(k) loan (also known as the Limited 203(k) loan)  for homes that have no structural damage and require no repairs to the foundation of the home.

With this loan, you can borrow up to $35,000 to be used on repairs.

Standard 203(k) loans, for homes that need more extreme repairs. These repairs include structural repairs or additions to the home.

With this loan there is no set limit on the cost of the repairs to be done, you just have to make sure the total mortgage falls within the FHA lending limits for your area.

After a 203(k) loan is closed, you must start the work within 30 days and it must be finished within six months of the close date.

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Frequently Asked Questions

Do I Qualify For a Home Rehab Loan?
If you are a real estate investor that is looking to buy an investment property to fix and resell, then you will automatically qualify if you have property to exchange as collateral for the duration of your rehab loan.

We will also require an appraisal of the property in its current condition and an estimated appraisal of what the home will cost after repairs. This prevents our future borrowers from putting more money into a home than what the final value of the property would be after the repairs are done.

What Will Be The Interest I Will Pay If I Get a Home Rehab Loan From You?
Good Question! The amount of interest you will pay on a rehab loan will vary on the amount, lifetime length of the loan, and several other factors. If you want a more precise answer, please fill out our contact form or give us a call and let’s discuss your next house flipping project.

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