Renovation loans simplified

Renovation Loan Options

Which renovation loan options are right for you? Call us for more info on selecting the best renovation loan options!

When trying to find the right renovation loan options to meet your project goals you will want to consult with a renovation loan specialist to make sure the project and budget fit your loan type. There are a few considerations to think about when making your renovation loan selection. Here are a few summaries and programs descriptions that can help with your renovation loan options decision making.

VA renovation loan

VA Renovation Loans

VA Renovation loan options are much like FHA 203k limited repair programs. The VA offers loans to purchase and renovate existing properties with a true Va renovation loan solution. A veteran will need to complete the VA loan application and specify a contractor and repair bid to get VA approval on the loan. Any property deficiencies noted from the appraiser that may normally hold up typical VA financing can be alleviated through including these repairs inside of a VA renovation loan. The home will need to appraise for the purchase and renovation amounts. Any plans and specs for improvements should be itemized and submitted alongside an estimate for the duration of the construction. Generally these repairs must be under 35,000 dollars in repairs and take no longer than a 90 day period to complete.

Home improvements approved by the VA include but are not limited to roof replacement, flooring repairs, WDO ( wood rot or termite repairs), HVAC ( Heating and cooling systems ), appliances and even bath and kitchen remodeling.

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FHA 203k

FHA 203k Limited Repair program ( formerly “streamline”)

FHA 203k renovation loan options increased in popularity in the 1980s to help buyers renovate homes with property conditions that would otherwise preclude financing. Many foreclosed and abandoned homes during the Savings and loans scandals of the 80s were in disrepair and this was a solution that would make the property conform to HUD minimal property standards for lending. Such property conditions include any health hazard or safety concern or practically any livability standard an owner wants to upgrade, such as floor coverings and finishes, and even appliances. FHA 203K Limited Repair Loans are available for ANY home one year or older, not just foreclosed homes.

Some key benefits are:

  • Combine purchase and renovation costs in one easy closing
  • Borrow up to $35,000 for renovation costs
  • No need to obtain a HUD consultant write-up
  • Financing covers non-structural defects
  • Homes can be eligible for financing that otherwise may not qualify for
    government financing like FHA

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FHA 203k Standard (Consultant K)

These Renovation loan options are for larger projects which require more supervision. A HUD Consultant is need to review plans, specs and administer the draw process for the loan. Renovation loan options for the Consultant K are unique compared to the streamline version in that the work can exceed $35,000, and it can be structural or add to the home’s footprint. FHA 203k Standard Loans apply to ANY home, not just foreclosed properties.

Some key benefits are:

  • Combine purchase and renovation costs in one simple closing
  • Borrow unlimited renovation funds (with appraisal)
  • A HUD consultant reviews the project and provides a write-up
  • Fix structural defects, move your home, or expand the size of a home with
    an addition
  • Homes are eligible for financing that otherwise may not quality for other
    government loans

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Homestyle renovation loan options

FNMA Fannie Mae Homestyle® Loan

Other Renovation loan options that are popular is the Fannie Mae Homestyle Loan. This is one of the most flexible renovation loan products in terms of its versatility. Homestyle can help buyers renovate homes with property conditions making them ineligible for financing and also take care of preferential and luxury ticket items. These property conditions cover any health hazard or safety issue or almost any livability standard a home owner wants to upgrade, such as floorc overings and finishes, and even appliances. Homestyle® features the most flexibility for investors, Second home financing and primary occupied homes. The loan covers also covers work
that is structural or that adds to the footprint of the home itself.
Homestyle® Loans
apply to ANY home, not just foreclosed properties.

Some key benefits are:

  • Combine purchase and renovation costs in one closing amount
  • Borrow unlimited renovation funds (with appraisal)
  • Third party consultant reviews the project and provides a write-up
  • Allows you to address structural issues, move a home, or expand the size
    of a home with an addition
  • FHA loans have less costs and no mortgage insurance needed

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 Renovation loan options