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Hello,

I have been looking at this one house where the developer went bankrupt earlier this year. The house is priced at a bargain, theres only one thing: the interior isn't finished. It still needs bathrooms and a kitchen. All the external work and drywall is done on the house.

So my question is how difficult is it to get a loan for something like this? Would I also need to get a construction loan to finish the house? What is involved here?

Any RE experts or people with this kind of experience please feel free to chime in.

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LeveragedSpeculator said: Hello,

I have been looking at this one house where the developer went bankrupt earlier this year. The house is priced at a bargain, theres only one thing: the interior isn't finished. It still needs bathrooms and a kitchen. All the external work and drywall is done on the house.

So my question is how difficult is it to get a loan for something like this? Would I also need to get a construction loan to finish the house? What is involved here?

Any RE experts or people with this kind of experience please feel free to chime in.

If a property going to be used as a primary residence, there is a possibility you can get a loan with Wells Fargo.. It's called Purchase and Renovate loan. As with any financial instituation in today's market, expect scrutiny.

Program Description Here.

Hope this helps.

Im looking at a similar place also, does anyone know if PenFed has a similar program?

anks329 said: Im looking at a similar place also, does anyone know if PenFed has a similar program?What do they say when you call?

As far as I know, lenders won't underwrite properties without ATTACHED fixtures (i.e. toilets, showers, lav sinks, kitchen cabinets, kitchen sink and appropriate electrical for appliances). You will need a construction loan to purchase an "unfinished home".

I'd just buy a foreclosure thats in good condition and at a good price instead!

We bought a partially gutted house from a family member. We had access to the house before the sale to do work on it. The mortgage company would not let us close on the house until it had everything in place, even baseboards and carpets. We had to do all the work before we actually bought it which was stressful because we were putting money into a house that we didn't own yet.

pj737 said: As far as I know, lenders won't underwrite properties without ATTACHED fixtures (i.e. toilets, showers, lav sinks, kitchen cabinets, kitchen sink and appropriate electrical for appliances). You will need a construction loan to purchase an "unfinished home".

Any recommendations for construction loans ?

I called AAFCU where I have my traditional loan and they won't do such loans outside the CO Springs area.

Call banks in the area. If you own other property I'd recommend taking out a HELOC on your current property instead of a construction loan, rates are better. Use the heloc for purchase and and construction, then mortgage the finished property and use the cash to pay off the HELOC. You'll end up with a regular mortgage and most likely easier access to capital than trying a construction loan.

jeannesteves said: We bought a partially gutted house from a family member. We had access to the house before the sale to do work on it. The mortgage company would not let us close on the house until it had everything in place, even baseboards and carpets. We had to do all the work before we actually bought it which was stressful because we were putting money into a house that we didn't own yet.

Yeah, we ran into that with this house. As the scheduled closing date approached the flooring wasn't all in because of an incompetent installer--they had to rip out a whole bunch of stuff. It was in both the builder's interest and ours to go ahead with the closing while they were still fixing the floor. Oops--no floor = no close. They slapped down a layer of vinyl over all the areas that weren't ready just to be able to close.



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