One of the most innovative loans on the market for real estate investors is the non-owner occupied renovation loan. This mortgage allows an investor to borrow the money to purchase a property that’s in need of renovations and also to borrow money to do the renovations, and then roll it all into one mortgage.
One of the beauties of non-owner renovation loans is that they’re based not on the current value of the property, but on what the value of the property is after the renovations are completed.
Many buyers know it’s possible to get a renovation home loan for an owner-occupied property. But few realize the same thing can be done for an investment property. At MortgageDepot we’re experts at helping real estate investors accomplish their goals through the use of non-owner renovation loans. We understand the complexities of this type of financing and are ready to help you learn more about the possibilities it can offer.
What You Need to Know About Non-Owner Occupied Renovation Loans
They’re Available For Up To 80% LTV (After Improvements) If you’re buying an investment condo to rent out, but the unit needs improvements, the amount you can borrow is based on 80% of the value of the condo after the improvements are made. If the renovated condo will be worth $200K, $160K would be the maximum loan available for purchase and renovations. The final determination of the value of the property is subject to an appraisal done after the renovations are complete.
The Renovations Must Improve the Overall Value of the Property
Experienced investors know that cosmetic changes done to a property might make it look good to some tenants, but they don’t necessarily add resale value. Before securing a non-owner occupied renovation loan, a detailed analyses should be done in order to ensure all improvements that are being financed are going to add resale value to the house so it will appraise for the correct amount after the renovations are complete.
All of the Improvements Must Be Permanently Affixed to the Property
An above ground pool would not be a good improvement for this type of loan, but new interior plumbing would.
There’s No Minimum Repair Amount Required
In other words, this is the perfect loan whether the property you’re buying needs 2 new bathrooms, a new roof and all new wiring, or it just needs a new driveway.
They work For 1 Unit or Several, and For SFRs, PDUs or Condominiums
Whether the investment property you’re buying is an attached or detached condo, a single-family residence, one unit in a mixed-use development, or an entire multi-unit building, this loan can potentially work for you.
- Borrowers Can Own Up To 4 Financed Properties
- Both Purchase and Rate & Term Refinance Options are Available
- Loans Are Based on the Borrowers Credit Score According to Desktop Underwriter (DU)
If you’re a real estate investor looking for a renovation mortgage loan to help you acquire and add value to an investment property, contact us at MortgageDepot today. We’re experts in non-owner renovation loans, and we’re looking forward to helping you achieve your goals.