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Rehab loans help real estate investors fund the purchase and renovation of residential properties. They’re used by both short-term investors to fix-and-flip properties as well as long-term investors looking for renovation financing for rental properties. Rehab loans combine a property purchase and rehab costs into a single, short-term loan with quick funding times and interest-only payments.
Average Loan Amount
Up to 90% of Rehab Costs
Loan Term
Up to 2 Years
Rates
Staring at 9%
Time Needed
Averaging 1 Month
How to Apply?
There are generally 2 types of rehab loans; hard money rehab loans and permanent rehab mortgages. Short-term investors use hard money rehab loans to purchase a property quickly, renovate it and sell. Long-term investors also use them to rehab and season a property before refinancing. Permanent rehab mortgages are used solely by long-term investors.
Smaller, local hard money lenders will typically offer a wider range of rates, fees, terms, and qualifications because they’re able to work with unique projects and borrowers. National lenders, on the other hand, generally have standardized costs, terms, and qualifications.
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Documentation Needed:
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Application
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3 Months of Business Bank Statements
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Personal Bank Statements
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Personal and Business Tax Returns
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Schedule of Owned Real Estate
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Prospective Property Documentation
Qualifications:
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550+ Credit Score
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Previous Construction or Rehab Experience
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Successful fix and flip history
Rehab Funding
Rehab loans, also known as hard money loans have a bad reputation, but in fact, many reputable companies offer them and many successful real estate investors use them. Rehab loans can be found at small local lenders, as well as at nationwide online lenders. They’re beneficial for both long-term investors and short-term investors.
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1. Get Pre-Qualified with a Hard Money Lender
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2. Receive Approval for a Hard Money Rehab Loan
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3. Get Financing
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4. Purchase the Home to Flip
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5.Carry out Necessary Renovations
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6. Exit the Property (Sale or Refinance)
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Rehab loans are great for fix-and-flip businesses and for buying rental properties that need a little work done. Rehab loans offer investors a short-term loan with interest-only payments, quick approval times, and facilitate both the purchase of a house and the renovation financing in a single loan.