Non-conventional - There is another renovation loan ONLY for single family homes that has a maximum loan amount of $3,000,000. NO work under construction with this loan program.
Last week we were talking to several clients who asked about their purchase of homes in the $750-900,000 range with $200,000-400,000 in renovation or remodeling. That would be perfect for this loan program. Your credit must be over 750 as I understand it and this is ONLY for single family homes with NO construction in progress.
The most you can borrow is 110% of what an appraiser estimates it will be worth after renovations, or the cost of the home plus the estimated renovation cost, whichever is less. At least $5,000 of what you borrow has to go toward renovations.
The maximum also must fall below the FHA mortgage limit for the area — $271,050 for single-family homes in most parts of the country and up to $625,500 in high-cost areas.
Passive Income Defined
Only two types of activities generate passive income as defined by the IRS. Rental activity, including rents and other fees paid to a landlord, are considered a passive revenue stream. Investing in companies but not providing hands-on direction is also a passive activity. This definition doesn’t apply to stock ownership, but merely financial arrangements in which an investor serves as a “silent partner,” bankrolling a business venture while leaving its day-to-day operations up to others.