Renovation Loan Overview
Renovation loans are eligible for 1st time buyers, trade up buyers, 2nd homes, and investors. Borrowers are able to purchase or refinance properties from 1 unit to 4 units and condo’s with these loans.
The idea of buying a fixer-upper and turning it into your dream abode can seem so perfect -- every nook and cranny just to your specifications! The reality, however, can be harsh. When you realize how much it will cost to remodel, you often also realize that you can't afford it. Or you find out that a lender won't give you a loan because the home is considered “uninhabitable” as it is. That's where an FHA 203k loan or a Home-Style loan comes in.
An FHA 203k loan is a loan backed by the federal government and given to buyers who want to buy a damaged or older home and do repairs on it.
A Home-Style renovation loan is backed by Fannie Mae and varies in underwriting guidelines, down payment, and loan limits. It’s does allow for investor to use the loan program, were the FHA 203k loan does not.
Contact the mortgage experts at The Lee Smith Group for complete, personalized assistance during your renovations.
What Type of properties can be Financed?
Attached homes, detached homes, and town homes.
One unit to convert to a two unit property
This scenario is an excellent opportunity to convert the basement into a legal income producing unit. The Washington DC row homes properties are ideal for these type of conversion. The value is based on a 2unit at time of underwriting.
One to Four unit Properties
Multi-unit properties are acceptable and usually projected rental income can be used to help qualify for the higher loan amount.
Renovation improvements are limited to the interior of the unit, but does allow for full remodel or just appliances.