What Happens to My Home Loan? From Failed to Passing Inspection, Rehabbing and Beyond

Hello, this is David Xie with the Xie Mortgage Team. And one question that we get asked all the time and thanks to all the viewers that have viewed our videos and like the Find My Way Home network. The question that we get asked all the time, how do I buy this home that doesn't pass inspection or needs a little bit of love? And this is what I'm going to talk to you about today.

So we've all wanted to invest in different properties at some point in our lives where we may see a great opportunity. And the second you walk into the home, it's like, oh no, this is not going to work for me. Or maybe there's just a lot of work or maybe it's just cosmetic things. Maybe it's an almost a complete tear down, down to the foundation and a rebuild. Everyone's got their own vision and there's no right or wrong way of doing this.

However, I want to talk to you about an option on how we can do these loans and be able to put that sweat equity into it. And this is a great way in, you've heard me talk in the past about like, investment properties and how I love investment properties. And with the rehab loans, typically they're for primary residences. They are available for investment properties as well.

And the way that these work is that you would purchase a home that needs some love or TLC. At that point, you have a vision of what you want to do. You'd hire a HUD inspector to go out there if the work is over $35,000. And if it's under $35,000, all you would need is a contractor quote.

With the HUD inspection, they basically go around the house and they inspect the entire property and say, hey, all of this stuff must be done in order to meet the guidelines. At that point, you would find your contractor that you would like to use. And they would basically go down the list of the required repairs and what you want to get done.

After the appraisal comes back, we would then appraise it based on the completed plans and specs that were laid out by your HUD inspector as well as your contractor. We have two teams here at design Mortgage Team where we handle the loan and we've got a team that handles the rehab process. And basically they go through and they work with your contractor and the licensing and the permitting, and they gather all the information that's needed to protect you the consumer.

And what we do is we meet at the fork in the road, and we put our minds together. The rehab part and the loan part, and we go to closing. And once you close, we'll have the amount of rehab that needs to be financed, plus a 10% contingency to cover any overages that may be discovered during the tear out and rehab process.

Within a couple months, once the contractor's done, you're in your brand new home or not a brand new home, but you know, new to you home with all the repairs and rehabs that you'd like. We'd love to help you out with a home that needs love or just needs a little bit of work or it doesn't pass inspection. So please give us a call at (757) 478-8493. And this is David Xie with the Xie Mortgage Team.

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