For borrowers who need to finance renovation costs into their loan, instead of paying out of pocket, these loans are great. They follow either FHA guidelines (the FHA 203k loan), or Conventional guidelines (the Homestyle renovation loan). These loan types take a long time to underwrite and close, and carry additional requirements and are complex, so we have a renovation team that helps walk our clients through every step. Here’s why you’d consider a Renovation loan:
- Buying a home that needs significant work sometimes costs more than borrowers have liquid funds. There is a complex list of what improvements can and can not be included in each of these loan types. Our office can guide you through that process.
- Financing renovation costs into an already-owned home is also common with program, for people who are basically refinancing an existing mortgage to include the renovation project costs.
- Strong borrowers are generally required for these renovation programs, regarding credit scores/history, income/job history, and assets. These loans are not for the “rookie” homebuyer.