There is a type of loan that people can get where they get money to fix problems with the house. who

The house I want to buy has a few problems and I cannot get a mortgage for it. I am able to fix the problems for much cheaper than paying a contractor. But I need both the loan to buy the house, and money to buy materials to fix the house. What type of loan is this and who gives this type of loan?

There is a type of loan that people can get where they get money to fix problems with the house. who does this

Its called a construction loan (even though you are renovating thats what they call it), where they lend you money based on the current condition of the home. They also appraise what teh home will be worth in fixed up condition and give you a line of credit you can draw on as these repairs are made (typically they will inspect the repairs and pay you the cost of each repair as it is made). Problem is, I'm not sure how this works if you do the work yourself (they may even make you get a licensed contractor for some of the stuff). Still, call around and ask different banks about this and if its a good deal for them I'm sure someone will give you this type of loan.

Also, fair warning, you've gotta jump throu lots of hoops to do this and its really a pain dealing with the banks on this - but if you handle the extra hassle it should work out.

PS - As a preious replyer said, you can get one thru the FHA called a 203K loan (but some banks also do this themselves).

There is a type of loan that people can get where they get money to fix problems with the house. who does this

It's called a second loan or equity line of credit.