FHA 203(K) Renovation Loan

If you’re looking to buy a home, then you would probably agree that one of the most frustrating things about the search is that properties are less than perfect. As we all know, the perfect home doesn’t always exist. However, Mr. Renovation can show you how to create it using a renovation loan. The home might need just a bit more to make it your dream home, but most home buyers will move on to other properties rather than seeing the home for what it could be. However, you don’t have to! There is a loan that doesn’t only help you improve the home but also provides an opportunity to customize it that most people do not know about. It is called an FHA 203(K) Renovation Loan and it can take that almost perfect home and turn it into the dream home you have been searching for!

Qualifying for and Advantages of FHA 203(K) Renovation Loans

Contrary to popular belief, the program is available for both first-time home buyers and current homeowners. It is a great advantage for buyers in a very competitive real estate market. In addition, if a property can’t be appraised because of the current state it is in, this loan can turn it into an appraisable property. Therefore, you will be much more likely to have your mortgage approved. In these situations, buyers can get a great deal on a property and customize it to their liking. These additions/upgrades will most likely increase the appraised value of the home. As a result, it even builds instant equity in the property as well!

The Upgrades/Additions That Qualify Under A 203(K) Renovation Loan

  • Add A Second Level
  • Home Raising/Home Lifting
  • Add A Deck, Patio, Sunroom, etc.
  • Add Bedrooms
  • Add Bathrooms
  • Upgrade Flooring
  • Upgrade Plumbing
  • Remodel Kitchen
  • Remodel Bathrooms
  • Add/Upgrade Heating
  • Add/Upgrade Air Conditioning
  • Update Siding
  • New Appliances
  • And Many More!

If you’re tired of passing on properties that appear to be great opportunities, then give Mr. Renovation a call! He can guide you through the application process, discuss your specific needs, and answer any questions about the projects you have in mind.

Fannie Mae HomeStyle Renovation Loan

Dreaming of renovations for a new home or the one you currently own? Then the Fannie Mae HomeStyle Renovation Loan may be perfect for you! This loan allows you to finance renovations you have only dreamed about to become a reality! Individuals purchasing a home or refinancing the loan of their current home can combine the Fannie Mae HomeStyle Renovation Loan into their transaction. The best part is that the renovations will add value to your new or current home, resulting in immediate equity!

Fannie Mae HomeStyle Renovation Loan for New Home Buyers

If you come across a property you love but needs updates or additions, don’t give up on it just yet! You can finance the upgrades through this renovation loan. The loan covers a wide range of home improvement projects that can help you take advantage of a great opportunity.

Fannie Mae HomeStyle Renovation Loan for Current Homeowners

If you are interested in refinancing your mortgage and have some ideas to upgrade your home, this renovation loan would be perfect for you. This could be a great opportunity to make the renovations of your dreams a reality! The Fannie Mae HomeStyle Renovation Loan can fund the renovation projects you want to complete while combining it with the refinance transaction.

What Projects The Fannie Mae HomeStyle Renovation Loans Can Finance:

  • Additions of Swimming Pools
  • New Patios
  • New Decks
  • Landscaping Upgrades and Installations
  • Kitchen Remodels
  • Bathroom Remodels
  • New Appliances (First Time Home Buyers Only)
  • And Many More!

Properties Eligible for The Fannie Mae HomeStyle Renovation Loan

  • 1-4 unit primary residence
  • Manufactured homes
  • 1-unit second homes
  • 1-unit investment property
  • Units located in PUDs, condominiums, cooperatives (if permitted), or leasehold estates

If you’d like to learn more about this great opportunity, then contact Mr Renovation today! He’ll be happy to answer your questions, discuss the renovations you have in mind, and help you with your application. He’s looking forward to hearing about your new project!

HUD Renovation Consultant

What is a HUD Consultant and why do I need one?

It just makes sense, if you are going to pay someone, you want something of value equal to or greater than your investment. 

With a 203(k) renovation loan, you will be investing in the services of a HUD Consultant. At first glance, most people wonder why they need one and what value is added to the transaction.  This article will explain the value added by a HUD Consultant and why FHA requires this service.

If you need assistance in finding a HUD Consultant in your area email me for assistance.

Is The Renovation Work That I Want Done Feasible?

This is a question that needs to be answered immediately after you sign a purchase contract and before your contracted option period or inspection period expires. Determining this is the first added value step the HUD Consultant will help you with.  The consultant will meet with you at the property and discuss what you would like to do as well as let you know what repairs must be done in order for the property to meet FHA/HUD standards. The consultant has three primary skills, which are included as part of his job – contractor/estimator, inspector, and bookkeeper.  During the initial visit, the consultant will use their contractor/estimator/inspector skills to determine a “ball park” estimate on what the cost of the renovation could be. This “ball park” estimate will be based on what needs to be done to meet FHA/HUD standards, what he recommends, what you want done (Desired) by a Feasibility Report, and uses their own reference to determine the estimated cost.  With this knowledge, you can intelligently determine what items of Desired and Recommended you would like to include in the renovation and if the renovation project is feasible for you to continue with the transaction. This by itself could save you a lot of time and money if you choose to just walk away from the deal. If you elect to move forward with the project after reviewing the Feasibility Report, then the next step is for the consultant to revise the report and send you a corrected copy along with an additional copy with no pricing.

Finding A Contractor

Choosing a contractor to do the work is 100% your responsibility. However, both the Consultant as well as your Lender can assist with information on how to find a qualified contractor. This process will be easier considering that you now have a Feasibility Report with a scope of work you can give one or multiple contractors to bid from. The Feasibility Report does not have the estimated costs, just the details of what work is required to meet your needs. Based on this, contractors submit bids to you, which are evaluated by yourself and consultant for accuracy and completeness of scope of work they are bidding on.  A contractor can now be selected based on which one best fits your renovation project.

The Work Write Up and Specification Of Repairs

With this step, the consultant is using their contractor/estimator skills. The consultant breaks the renovation scope of work into 35 individual categories and breaks the costs down into labor and material for each category.  The consultant then makes sure that the final scope of work and contractors bid match. The work write up will give you a total cost of the renovation, which will now match the contractors bid in total price.  The lender will send this document along with the sales contract to the appraiser so that they can complete the appraisal report knowing what renovation work will be done.  This adds value to the transaction and is critical for the appraiser because they will appraise your new home with the assumption all renovations are complete. You will know the after improved value of your home prior to closing. You will also know the estimated costs of renovation prior to talking to any contractors. This saves several weeks in the processing time waiting for contractor estimates.

The Loan Is Closed And Renovation Begins

The Consultant now has two responsibilities, one as an inspector and one as a bookkeeper. With a 203(k) renovation loan, the contractor can only be paid for work completed. When the contractor is ready for a draw, they contact the consultant. The consultant will go out to the project and make sure all of the proper building permits have been issued and the work being billed for has been completed and in a good workmanship like fashion.  The consultant will prepare a draw request showing amount of work completed in a good workmanship fashion based on already established draw budget for each of the 35 categories. You, the contractor, and the consultant will all sign and approve the draw request.  The consultant will also prepare a lien release for the contractor to sign. The consultant is required to account for all funds disbursed through each line item as well as any funds disbursed through the contingency reserve. This is where the consultant uses their bookkeeping skills.

The Contingency Reserve and Change Orders

Seldom does a project go exactly as planned. Often times an unexpected expense pops up. We are prepared for this by financing an additional 10% to 20% of the estimated costs into the mortgage loan. Any changes to the original scope of work must be approved through a written change order approved by you, the Consultant, and contractor. The Consultant manages all change orders and contingency reserve funds. When a change order is written, it must be signed by you, the consultant, and contractor.

Project Completion

Upon completion, the consultant will verify all work is complete in accordance with the SOR from the Work Write-Up and that all permit inspections are complete and approved.  You will then sign a certificate of completion stating you are satisfied with the completion of the project. If there is any remaining funds in the renovation escrow account, the funds will be paid towards your mortgage principal balance.

As you can see, the HUD Consultant adds a significant amount of value to your renovation project. The fee for the consultant is based on the amount of renovation work to be done and this fee is set by HUD. In most cases, the consultant will require the fee to be paid upfront. However, if this fee is  financed into your mortgage, then the amount you pay upfront will reduce your cash needed for closing. The consultant will review with you their fees and responsibilities. If you have any questions, you can ask them directly.

VA Renovation Loan

If you are a veteran, then you should be aware of every type of opportunity that can benefit you and your family. You probably know about the military discount at your favorite local restaurants, but do you know about the ones available that can save you hundreds of dollars instead of just a few bucks on a cheeseburger? There are great programs available for real estate transactions that can save you hundreds.

Most veterans know about VA mortgages, but many do not know about VA renovation loans. These renovation loans give a major advantage to veterans whether they are buying a new home or would like to renovate their current home. Especially for those purchasing a home, these loans can help you afford upgrades on a property that needs a bit of work but is listed at a great price. You will have the ability to take a house you like and turn it into a home you will love with a VA renovation loan!

VA Renovation loans are very flexible for many different types of projects. Some examples of these projects are:

  • Aesthetic Improvements
  • Individual Room Enhancements
  • Flooring Updates
  • Plumbing Upgrades/Additions
  • Additions for Handicap Accessibility
  • Wheelchair Access Ramps
  • Expand and Widen Showers
  • Lower Countertops
  • Build A Handicap-Accessible Bathroom
  • Upgrades of All Major Free-Standing Appliances (First Time Home Buyers Only)

There are also financial benefits that many veterans are unaware of. The biggest advantage is the low-interest rates in comparison to private lending options. In addition, purchase or refinance combined with cash out is permitted. Furthermore, the appraised value will be based on the completion of the renovations. This is a great incentive because you build instant equity on your property.

If you are interested in learning more about VA renovation loans, then give Mr. Renovation a call! He will be happy to provide both basic information about the program and specific guidance for any property you already have renovation ideas for.

Construction To Permanent Loan

Having a hard time finding a home you love? Do you wish you can just finance and build your dream home but don’t know where to start? If so, then a construction to permanent loan may be perfect for you! This type of loan comes with many financial benefits and is incredibly convenient.

Don’t Pass on A Great Plot of Land

Most potential buyers will pass on a plot of land because they would not know where to start with the construction of a new home. They think that financing the construction is not possible. However, with a Construction to Permanent Loan, it absolutely is!

Individuals and Homes Eligible for A Construction To Permanent Loan

Many buyers are surprised to hear that they qualify for this loan. Most people that are interested in building a new home are eligible. This includes buyers looking to purchase a primary or secondary home. Modular, manufactured, and new construction homes are all eligible.

Financial Benefits of Construction to Permanent Loans

You may be thinking, there has to be a catch…you must need a large down payment, there are multiple loans I need to worry about, or I need to pay closing costs on multiple loans. All of these are not true! There are very low down payment options available for eligible applicants. In addition, the build and finance costs will all be bundled into one loan. You will not have to worry about being approved for two different loans and making two separate payments. Furthermore, since it is only one loan, there is only one closing and one set of closing costs.

Stop thinking that you can’t finance the complete construction of your dream home! Mr Renovation has helped many people build their dream home with the help of this loan. He can answer any of your questions and get the loan process started.