Renovating with Home Improvement Loans
Are you looking to remodel your kitchen, update your bathroom or install energy efficient windows? Or are you considering buying a house that needs a little “TLC” to get move-in ready? Either way, we can help you find the best home improvement loan to meet your needs.
Home Improvement Loan Options Include:
FHA 203k Loan Information
One of the most popular and diverse home improvement loans is the FHA 203(k) Renovation Mortgage. This type of loan offers a lot of flexibility. You can make upgrades to your existing home such as a kitchen or bath renovation, reconstruct a home this is presently unlivable or make improvements to a newly purchased home. You can even use an FHA 203(k) loan to tear down an existing structure and build a new one using some portion of the original foundation.
With the FHA 203(k) You Can:
- Replace a roof
- Install siding
- Paint the interior and exterior of the house
- Purchase new appliances
- Install new flooring
- Build or replace a deck/patio/porch
- Replace windows
- Remodel the kitchen
- Repair or replace the septic system
FHA 203(K) LOAN OPTIONS:
LIMITED: The 203(k) Limited is an all-in-one loan used for homes that need minor repairs. It allows borrowers to finance the purchase of an existing home and make improvements up to $35,000 before move in. There are no minimum repair costs and the borrower must occupy the property.
STANDARD: The Standard 203(k) is an all-in-one loan used when homes need major rehabilitation, or when repairs are structural, involve landscaping, or when renovation costs exceed $35,000. There must be a minimum of $5,000 worth of repairs and the borrower must occupy the property.
FHA loan limits are based on property type and location of the property being financed. A portion of the loan proceeds are used to pay the seller, or in the case of a refinance, to pay off the existing mortgage. The remaining funds are placed in an escrow account and released as the work is completed. Up to six months of mortgage payments (principal, interest, tax and insurance) can be financed if a HUD consultant determines you need to be displaced from the home during repairs. This helps you avoid making double housing payments.
*Not all borrowers will qualify; contact us for more information on fees and terms.
HomeStyle Renovation Mortgage
The HomeStyle Renovation is a single-close loan that enables you to purchase a home that needs repairs, or refinance the mortgage on your existing home and include the necessary funds for renovations in the loan balance.
There are no required improvements or restrictions on the types of repairs allowed or a minimum dollar amount for the repairs. Repairs or improvement, however, must be permanently affixed to the real property and add value to the property.
With a 5% down payment you can add your taste and style to a house to make it your home with remodeling projects like a new kitchen, bathroom, room addition or energy efficient upgrades.
Highlights of a HomeStyle loan:
- Purchase or refinance and remodel
- 5% minimum down payment for primary, single-family residences (10% for second homes)
- You can use gift funds for down payment and closing costs for owner occupied, primary residences after you contribute a minimum 3% down payment
- 3% seller contribution allowed
- Cosmetic and structural renovations allowed
- Allowable improvements can include landscaping, appliances, swimming pools and more