Funding 365 has completed a refurbishment loan to help a landlord purchase and renovate three HMO properties in Cumbria and Lancashire after acquiring them at auction.
The lender provided a £510,000 facility over a 12-month term at an interest rate of 0.74% per month. The loan was structured to deliver 68% net day one LTV while also providing £110,000 in arrears to fund 100% of the refurbishment costs for one of the properties, a seven-bedroom HMO.
The refurbishment works include installing en-suite bathrooms in every bedroom and renovating the communal kitchen. The borrower plans to refurbish the remaining two properties, a five-bedroom HMO and an eight-bedroom HMO, using their own funds.
Once work has been completed across all three properties, the landlord intends to let them before refinancing onto a specialist buy-to-let mortgage.
Refurbishment loan supports HMO investment
The facility was completed under Funding 365’s enhanced light refurbishment product, which offers bespoke lending solutions of up to 75% net day one LTV, alongside works funding of up to 40% of the property’s open market value.
The product is available on a range of residential and semi-commercial assets across England and Wales, including HMOs, multi-unit freehold blocks (MUFBs) and purpose-built student accommodation (PBSAs).
“This facility is a great example of how versatile our products are,” said Dhivian Pirabaharan, underwriter at Funding 365 (pictured).
“Here, we were able to combine auction finance with both funded and self-funded refurbishment to create the right solution for our borrower. Brokers are sometimes surprised to learn that we’re not a Southern-centric lender. In reality, our loan book is spread right across England, Wales and Northern Ireland. No two days are the same as an underwriter at Funding 365.”
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