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Can I get a conventional mortgage and pay cash for the renovations instead of a 203k loan?

This home (in Massachusetts) would be my primary residence, home price is $75,000, I have 20% to put down and will have the +-$15,000 to make the home liveable. This would include tying into city sewer and crushing the failed septic system. Will I qualify for a conventional loan If I could show the bank that I had the cash to do the renovations? I'd rather pay cash for the renovations than borrow additional money and be restricted to 203k guidelines.
  • September 10 2013 - US
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Answers (4)

203k loan is a program that enables you to purchase a home and finances certain upgrades and repairs as part of your mortgage. Work with a consultant who can evaluate the property if it qualifies for the 203k.
  • October 20 2013
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You are not limited to a 203K loan for renovation.  Conventional renovation loan programs exist.

I know of no lender that will close on a home in need of repair without the loan being a renovation or construction loan.  What is the status of the septic system?  HAs it failed Title V?
  • September 10 2013
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Most lenders will not lend if the house is not in livable shape now.  You may have to see if any Banks or Credit Unions have a portfolio program that they would be willing to work with you. 
  • September 10 2013
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I have seen deals like this go through. Your lender will have a discussion and the approval process may be a bit longer. I would recommend talking to a local (community bank) lender. When putting 20% down you should be in a position where there will not be loan conditions related to the condition of the home.
  • September 10 2013
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