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Renovation Concierge Service
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Get the guidance you need!
Are you interested in a home in need of repairs? Have you found a distressed home needing repairs/upgrades and much-deferred maintenance? Renovation Lending options, such as FHA 203K, Conventional, and VA Renovation mortgages, often provide the precise tools required to purchase homes in this condition while financing the necessary or desired repairs.
With current inventory constraints and limited opportunities available in the market, renovating a home that others are not considering often provides a way to grab a great chance that your competition may be sleeping on.
Amidst the current inventory constraints and limited opportunities in the market, choosing to renovate a home that others are not considering can be a game-changer. It's a chance to seize a unique opportunity that your competition may be overlooking, giving you a strategic edge in the real estate market.
One of the most significant advantages of renovation lending options is the freedom it offers. You're liberated from the often stressful and time-consuming process of negotiating with sellers for repairs. Additionally, you won’t need to explore additional financing tools like credit cards and home equity lines, which may not allow you to leverage after improved value and often come with higher interest rates. This flexibility can be a game-changer in your home-buying journey.
First-time buyers can buy a fixer-upper and renovate it. Look at homes in almost any condition. Think like an investor but buy as a traditional buyer.
This program offers a flexible financing option for new and existing homes, allowing for remodeling, repairs, or updates up to $35,000. This loan empowers you to make the cosmetic repairs you desire. The Limited Renovation loan is used for smaller projects because HUD only allows up to $35,000 in repairs. This loan is for a primary home only, 1-4 units.
Sample Repairs
What can be included in the loan:
Loan Example:
This program offers a versatile financing solution for major renovations, whether you're working on a new or existing home. It's not just for specific repairs-it's designed to cater to a wide range of renovation needs. Unlike the Limited Renovation Loan, there's no cap on the dollar amount*, giving you the freedom to tackle even the most extensive projects. However, there are some exclusions for luxury upgrades, such as new pools, hot tubs, outdoor kitchens, and satellite dishes. This loan is for a primary home only, 1-4 units.
Sample Repairs
Sample Repairs
What can be included in the loan:
Loan Example:
With a VA Renovation loan, the veteran can buy/refinance a home and all the renovation upgrades into one loan. The Veteran can buy a home that does not meet health and safety guidelines to be able to finance a house and all the renovations into one loan. The Veteran can also make ADA upgrades to make the home more livable. This loan resembles the FHA 203k Limited, but the repairs can cost up to $75,000. This loan is for a primary home only, 1-unit.
Sample Repairs
What can be included in the loan:
Loan Example:
Homeowners are embracing the freedom to renovate like never before. With a Conventional Renovation loan, they’ll have the financial power to embark on various renovation projects, from essential repairs and energy updates to landscaping and luxury upgrades. This loan can be the key to transforming a house into a dream home or reviving an older home to its former glory, putting the power of renovation in their hands.
Envision the endless possibilities with a Conventional Renovation loan. Your customers can finance the renovation or rehabilitation with conventional purchases or refinanced home loan. The loan-to-value (LTV) is calculated based on the proposed project, giving them increased purchasing power and a wide range of options to personalize their home. This loan is not just about financing; it's about turning their vision into reality and making their home their own.
This program can be used for a primary home, 2nd home, and Investment properties.
Sample Repairs
What can be included in the loan
Loan Example:
The 203k and Conventional renovation allows you to finance the purchase/refinance and renovate and improve the home with a single loan. Both mortgages will enable you to borrow against your home’s future improved value, increasing your borrowing power compared to a second line of credit or HELOC.
Have you found that home you almost love? The FHA, VA, and Conventional renovation will allow you to buy a fixer-upper or just a home you want to renovate. You can either buy a move-in ready home and do repairs and upgrades little by little with your out-of-pocket money or do it all at once and renovate after you close your home purchase.
There are some factors to consider when deciding on an FHA/VA or Conventional renovation loan.
With all renovation loans, the goal is to have any repairs/upgrades to add equity to the home based on the future improved value appraisal. However, it's important to note that some repairs/upgrades are functional, such as replacing an HVAC or fixing or adding an AC. These functional repairs may not add any or very little “future improved value” since they require a functional home. Understanding this can help you plan your renovation budget more effectively.
When the repairs are functional, or you think they will not add as much value dollar for dollar, then the best loan option is an FHA 203k loan. Since we know that dollar-for-dollar worth of repairs will not necessarily add equity to the home’s future value, the 203K loan allows the lender to use a formula of 110% of the after-improved value.
For example, if your purchase is $500,000 and renovation is $75,000, we would assume the future value appraisal will at least be $575,000. If the future value appraisal is lower and you buy with a conventional/VA renovation loan, you might need to come up with the difference. If the future value appraisal is $550,000 on a traditional/VA, you are stuck negotiating or bringing in the additional $25,000. If you are financing the same scenario with a 203K loan, we can multiply the future value of $550,000 x 110%, and the loan could go as high as $605,000, but we only need $575,000, so you will rarely lose a deal with a 203k loan using the 110% formula.
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