I have had a few listings that have been renovated using Ygrene funds. The houses have all looked great and had things like new impact glass and new roofs, so what could be wrong with that? The problem is that the owners are trying to sell these improvements at a premium without having finished paying for them. Each and every time I have had a Ygrene property, the owner has thought that the buyer would simply take over their tax bill payments. However, that would mean that the buyer would be double paying for the work by purchasing the improvements with the home and then paying off the loan over the course of their home ownership. Frankly, buyers are too savvy for that! Even if they are not so savvy, then their banks will likely not allow them to assume the Ygrene payments.
Eventually what happens is the seller has to pay off the loan prior to selling their home, and that can be a big chunk of change that can also include a pre-payment penalty. Whenever this comes up I always wonder if a home equity loan would have been the way to go to make these home improvements. Every situation varies, though, and I suppose that there is not really a good answer to that question. A seller might not have enough equity in their home to get the necessary funds for repairs, or maybe Ygrene sounded like a great plan because they were going to stay in the house for 30 years but they are now getting a divorce.
Ygrene always seems like a great option, but be sure to do all of your research before committing to this type of program because, although it can do wonders for a house, it is not always the perfect program that it is cracked up to be.
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