What if contract does not have upfront $$ for 203k loan

I have a 3 family brownstone my contractor completed 2 units. In order for me to complete the duplex I am getting 203k loan, however my contractor can’t afford the upfront cost. Any suggestions? The problem with a refin mortgage is the bank won’t recognize future rental income.

enew555

in About Brooklyn 11 years ago

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resident2 | 11 years ago

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This is why 203K’s are tricky, if the homeowner does not have the upfront cash, then the contractor needs credit lines and it puts the contractors costs up. Waiting for the Bank to release funds to keep going means that you the homeowner is often paying rent and the mortgage and the contractors credit line still needs paying as well….the cycle of credit and squeezing money! POP! Many quality, unless the property has the money upfront, Contractors do not want to work with 203K’s because of this.

bedstuyreno | 11 years ago

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You could take the loan and upfront the costs. Once the work is done you would keep the money the bank pays. This only works of course if you can upfront the costs.

enew555 | 11 years ago

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I hear you he does such quality work, even though he his broke.

no-permits | 11 years ago

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get a new contractor or renovate out of pocket.