How to Qualify for Rehab Loan

[Eugine]

1. Confirm you have an eligible property. Rehab loans are only used on properties that contain between one and four units, and have been structurally complete for at least one year. It's important to understand that rehab loans are not construction loans--instead, they are used to rehab or retrofit existing properties, not build new ones. A demolished building may be eligible as long as a foundation for the property is still intact and has been there for over a year. Some mixed-use properties are eligible (zoned both commercially and residentially), but restrictions apply. See Resources for a complete breakdown.

2. Determine the condo restrictions. Some condo 203(k) loans are available, but they must meet the following guidelines: they must be owner-occupied, not rental units; proceeds of a rehab loan can only be used to improve the interior of the condo, not the exterior; the rehab mortgage balance cannot be greater than the value of the rehabilitated condominium.

3. Determine the reason for the rehab loan. If you are trying to rehab the property to meet energy efficiency standards, you are qualified. Luxury or cosmetic improvements are forbidden. If you need to improve any major system appliances (heating units, air units), you are qualified for a rehab loan.

[henry123]

It is for the first time I have heard about Rehab loan and I would like to appreciate you for sharing such an impressive information with us regarding rehab loan.