What are rehab loans? | February 15, 2021

What are rehab loans? | February 15, 2021

Question: What are rehab loans?Have you ever seen a home that would be perfect, but just needed a few thousand dollars or more to get it to where you wanted it to be and didn’t have the extra cash on hand to accomplish that?Well, there is actually a loan for that. It’s called a Rehab Loan. There are a number of different types available, from the Fannie Mae Homestyle, to the FHA 203(k), to the VA Rehab and Renovation loan just to name a few.With these loans, you are able to get a loan for the purchase, plus an additional loan amount for repairs and improvements. Depending on the loan program, there may be a limit for the total amount that can be borrowed for repairs and improvements, but this money may be used for a broad number of updates.Whether replacing the flooring, changing out the kitchen, putting on a new roof, replacing windows, adding on an addition, or even building a detached workshop or garage, as long as it increases the value of the home and will appraise with the new work done to the home, you can channel your inner Johanna Gaines.With availability of Rehab loans, this can open up a number of new home buying opportunities that might not have been available to you previously.Additionally, in a Sellers Market like we are experiencing today, a rehab loan can also help protect you on your new purchase by giving you the cash to make repairs discovered during the home inspection that the sellers are not willing to do.If you have any questions, give us a call. We look forward to hearing from you.