What are Renovation Loans?
Considering a distressed property, fixer-upper, or home in need of some repairs? Homes that need a little work or updating can often be a great bargain turned investment, but some potential buyers shy away from these deals, afraid they can’t afford an out-of-pocket expense for renovations. eLEND’s available home renovation loans allows financing of the purchase price as well as the cost of repairing or renovating several elements of the home in one mortgage loan.
Benefits of Renovation Loans
- Take out one loan to both purchase and renovate a home, also available for refinancing
- Low mortgage rates and low down payment requirements for qualified borrowers
- Potential to earn equity quickly by purchasing a home below market value and repairing or remodeling
- These loans facilitate the improvement of distressed properties, which contribute to the betterment of neighborhoods and communities
- Renovate a property that is above the conforming loan limit
Available Renovation Loan Programs
- FHA Standard 203(k) Rehabilitation Loan – For homes in need of extensive repair or renovation totaling more than $35,000, possibly including structural repairs
- FHA Limited 203(k) Rehabilitation Loan – For homes in need of minor repairs at an expense of up to $35,000; Properties located in Qualified Opportunity Zones (QOZ) may have total renovation and repair costs up to $50K
- FHA Repair Escrow 203(b) – For purchasing a home directly from HUD that needs cosmetic repairs not to exceed $35,000
- Fannie Mae HomeStyle® Renovation Loan – For those looking for a conventional renovation mortgage loan option with competitive rates. PLEASE NOTE: THIS PROGRAM HAS BEEN TEMPORARILY SUSPENDED UNTIL FURTHER NOTICE.
- USDA Renovation – Homebuyers in rural areas can combine the purchase of a home with any needed repairs.
- Refinance Renovation Loan – Additionally, you can refinance your existing mortgage plus the cost of repairs and renovations with one of eLEND’s renovation loan options
What improvements are allowed with a Renovation Loan?
The list of allowable improvements differs from program to program, but most Renovation Loan programs include:
- Upgrade or modernization of central air/heat, plumbing, and electrical systems
- Repair or replace well and septic systems
- Repair termite or moisture damage
- Remodeling of kitchen and baths
- Addition or replacement of exterior decks, patios, terraces, and porches
- Permanent hardscape such as driveways, walkways, retaining walls, and fences
Want to find out if your dream renovation project is covered by a home renovation loan? Call one of our mortgage loan professionals at 1-800-634-8616 today.
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