Rehab and Renovation - Loan Program 1 - for Pennsylvania

This is an ideal program for rehabilitating Pennsylvania homes that are currently owned or being purchased. There is one closing and one rate through the course of both the construction and the life of the loan.

For regular construction on homes that do not yet exist loans click here

Available Loan Terms: 10-30 years fixed or 21-30 years Bi-weekly.

Construction Term: 6 months

Eligible Pennsylvania Borrowers:

• U.S. Citizens
• Permanent resident aliens
• Non-permanent resident aliens
• Non-occupant co-borrowers
• First-time homebuyers

Ineligible Borrowers:

• Foreign Nationals
• ITIN Borrowers

Eligible PA Property and Occupancy Types:

• 1-4 unit primary residences
• 1-2 unit investment properties
• Second homes
• Log homes
• Modular homes
• FNMA eligible Condominiums and PUDs

Ineligible Property and Occupancy Types - The following property types are ineligible:

• 3-4 unit investment properties
• Manufactured homes
• Leaseholds
• Co-operatives
• Conversions

Minimum Loan Amount: $100,000

Maximum Loan Amount:

• $417,000 – 1 Family
• $533,850 – 2 Family
• $645,300 – 3 Family
• $801,950 – 4 Family

Maximum Loan-to-Value
Purchase and Limited Cash-out Refinances - Pennsylvania only

Property Type     LTV         CLTV         HCLTV
1 Unit Primary             95%         95%         95%
2 Unit Primary             95%         95%         95%
3-4 Unit Primary          80%         80%         80%
Second Home             95%         95%         95%
1 Unit Investment        80%         80%         80%
2 Unit Investment        70%         70%         70%

Minimum FICO score = 720 (740 for self-employed).

Notes:

LTV Calculation:
Purchases:

Loan amount divided by the lesser of:
“As-completed” value, or Purchase price + rehabilitation cost + allowable closing costs.

Limited Cash-Out:

The mortgage amount may include the amount required to satisfy the existing first mortgage, the amount required to satisfy any outstanding subordinate mortgage liens that are more than one year old (if the borrower plans to satisfy them), closing costs (including prepaids), points, and the total renovation costs (including allowable construction-related costs) for the home improvements. No money to borrower at closing.

LTV Calculation - Loan amount divided by the lesser of:
The “As Completed” value or Existing first liens + existing subordinate liens that are more than one year old + rehabilitation cost (which included soft costs, prepaids and points) + contingency reserve + closing costs.

Maximum Number of Financed Properties: When the subject property is a second home or non-owner occupied, the maximum number of financed properties the borrower(s) may have outstanding is 4.

Subordinate Financing – Subordinate financing must be an approved Community Second loan.

Seller-held seconds are not permitted.

Assumability - Not permitted.

Prepayment Penalty - None

Rehab Amount:

• The maximum loan amount includes any financed rehabilitation amount.|
• There is no minimum rehab amount.
• The total rehabilitation costs (including any financed PITI) may not exceed 75% of the as-completed value of the property. Single Loan Waivers are required when costs exceed 50% of the as completed value.
• If the borrower(s) are unable to occupy the property during the rehab, owner-occupants may finance PITI for any payments due during the time that property is expected to be vacant due to construction (with a maximum of six monthly payments or 13 biweekly payments).
• A Contingency Reserve equal to 10% of the cost of the rehabilitation is required.
• All rehab funds, including contingency reserve, are place in the escrow.
• Unused contingency funds must be applied to reduce the balance of the mortgage unless the contingency reserve was provided from the borrower’s own funds; or the borrower may elect to pay for any additional elective repairs or improvements to the property (personal property purchases, repairs, or improvements are not allowed).

Rehabilitation Requirements

• All rehab work must be performed by a qualified, experienced and licensed contractor chosen by the borrower and satisfying all bank requirements.
• Inspectors can be FHA approved or provide equivalent qualifications as established by bank.
• The Field Appraiser must have a minimum of two (2) years experience in new construction and/or rehab appraisal using plans and specifications to determine value.
• A plan reviewer is required to review the contractor’s write-up when the rehab amount exceeds $15,000.

Payment and Interest rate: The rate tends to be only 0.125% higher than the current rates for a regular purchase or refinance. The payments include PITI and begin after closing.

Please call 866 577-PENN for more information on this excellent rehab loan product.

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