Rehabilitation mortgage - A mortgage that covers the costs of rehabilitating (repairing or Improving) a property; some rehabilitation mortgages - like the FHAs 203(k) - allow a borrower to roll the costs of rehabilitation and home purchase into one mortgage loan.
A Title-1 Loan, is considered to be a property rehabilitation loan.
A.K.A a rehab loan, allows homebuyer wants to purchase a house in need of repair or modernization or refinance an existing dwelling.
Fannie Mae also has programs such as the Homestyle and Homestyle Renovation which will allow borrowers to do construction on their homes.
These programs are available through a variety of different lenders, each has its own guidelines. Some lenders will lend you 65% of the Future Value of the home, that money can be used for the purchase and rehabilitation construction.
Often times money can be held in an escrow account and disbursed to contractors as the work is done.
Rehabilitation mortgage - A mortgage for the purpose of repairing and improving a resale home or building.
You may be able to get a loan based on what the home will be worth after the renovation is completed. This type of loan is referred to as a Renovation or Rehabilitation Loan.
When doing renovations to your home with a rehabilitation loan look at what the cost of the rehabilitation is going to cost versus how much the home will be worth after the rehab. is done. You don't want to overdo the home and put a ton of money into the home and only get half, or less, of the money paid for the rehab. work back.
Also known as a FHA 203K rehab loan. You need at least $5,000 in repairs in order to get the loan.
Many Cities have thier own local programs available that don't have to be paid back provided you own your home for a specific period of time.
Fannie Mae Homestyle mortgage is a good rehabilitation loan.
