McDonnell Group Practical Guide to Renovation Loans 4.13.18 - Flipbook - Page 8
QUESTIONS? WE'VE GOT ANSWERS!
What are renovation
loans and what
options are there?
Renovation loans are purchase or refinance mortgages that allow
borrowers to include the cost of repair or renovation in the some
loan. The two most popular renovation loans are:
•
•
What differences
are there vs. typical
loan application
process?
What are the guidelines
for renovating the
property and what
repairs are eligible?
FHA: 203(K) program for purchase or refinance of a primary
residence
FannieMae: HomeStyle program for purchase or refinance of
primary residence, second home or investment property
In addition to traditional mortgage underwriting, renovation financing
requires a lender-approved General Contractor to oversee the
renovation project. The Lender may also require the applicant to
employ the services of a 3rd party renovation expert known as a HUD
Consultant to represent the applicant throughout the loan and
renovation process. Depending on the scope and complexity of the
improvements, design costs, architectural & engineering fees and
building permits may be required.
The 203(K) program requires at least $5,000 in improvements.
Repairs or improvements may include:
• Structural alterations and reconstruction
• Modernization and improvements to the home's function
(kitchens. baths. etc.)
• Changes that improve appearance and eliminate obsolescence
• Reconditioning or replacing plumbing, installing a well and/or
septic system
• Adding or replacing roofing, gutters and downspouts
• Adding or replacing floors and/or floor treatments
• Major landscape work and site improvements
• Enhancing accessibility for a disabled person
• Making energy conservation improvements
To learn more, call us at 714.559.3696 or visit
us online at www.financemyimprovements.com
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