Think of all of the homes you search for that meet everything on the checklist. BUT what if the home does not meet lender condition requirements? Renovation loans help finance a purchase along with the home improvements desired. So many people watch shows on HGTV such as Fixer Upper, Love it or List It, and Flip or Flop. Therefore it is reasonable to expect that the ideas start flowing for remodeling plans to turn that so-so home into a dream paradise. Well, that is what our Renovation Loans allow buyers to do. One can buy a home, contract for home improvements, close, and then complete the renovations. Additionally, renovation loans solve a very common problem in the home shopping process. No repairs are allowed prior to closing. So what happens if the home needs repairs, but the seller will not fix them? That is where a purchase rehab loan helps.
Home Improvement Examples
Let’s explore the types of home improvements allowed under our program. Our FHA 203k loan program allows for a multitude of home improvements to a home. Here are examples of allowable repairs on our Renovation Loans:
Windows | Bathroom Remodel | Kitchen Remodel | Roof Replacement | New Siding | New HVAC | New Flooring | Painting Inside or Outside | Deck | Garage or Carport | Well Installation | Septic Tank Installation | Gutters & Downspouts | Plumbing | Electrical | Weatherization | Appliances | Mold Remediation | Additions | Structural Repairs | Major Landscaping | Swimming Pool Repair ($1500 max) | Handicap Retrofit | Converting Multi-unit to Single Unit | Relocation of Load Bearing Walls
We finance these renovations through our FHA 203k home loan so let’s see how it works.
How FHA 203k Renovation Loans Work
Most are familiar with an FHA loan. It is a low down payment loan that is forgiving on credit among otherguidelines. Furthermore, what most don’t realize is that there is a subprogram called an FHA 203k which allows for improvements. These may be financed into a purchase or refinance loan. In addition, benefits of the loan include:
Down payment is 3.5%
Use the “As Completed” appraised value
Certain costs for the renovation may be in the loan
Work may be completed after closing
Initially, we mentioned examples of home improvements allowed under this program. In addition, the FHA 203k loan is for primary residences only. So if buying a second home or rental property, we are not able to use this product. Finally, there is a requirement of a 660 minimum credit score.
Team Move Mortgage offers our streamline and full FHA 203k loans in our local office markets. Our offices are located in Wilmington, Sanford, Southern Pines, and Whiteville. But we also easily service many markets surrounding our offices. So, additional local markets include Fayetteville, Raleigh, Durham, Hampstead, Leland, Myrtle Beach, Conway, Jacksonville, Southport, Shallotte, and the rest of NC and SC.