The renovation loan your home deserves.
- A Homestyle Renovation loan, backed by Fannie Mae.
- A Standard 203(k) Renovation loan, backed by the Federal Housing Administration.
- A Streamlined 203(k) Renovation loan, backed by the FHA.1
FHA 203(k) Renovation loans
Qualified borrowers can take out an FHA 203(k) Renovation loan for the home they currently live in or at the same time they’re buying a new home. Some homebuyers use this type of financing to address problem areas the home inspector identified.
These rehab loans can only be used for “necessary” upgrades or repairs, which means that luxury items are off the table. In other words, these loans can’t be used to build an in-ground pool, create a high-tech home theater, or finance other fancy projects.
Quite a few items can be considered a necessity, including remodeling your kitchen, replacing your roof, upgrading your HVAC system, Improving accessibility for people with disabilities, energy conservation improvements, and many other projects.
Sometimes called a Limited 203(k) Renovation loan, the Streamline 203(k) limits upgrades to $35,000. The Standard 203(k) doesn’t have a $35,000 cap and the loan limit is based on overall lending limitations for single-family homes within your area.
HomeStyle Renovation loansThis type of rehab loan is simple, flexible, and affordable. Each situation is unique, but some borrowers can finance up to 97% of the home’s Loan-to-Value ratio (LTV). The funds can be used for virtually all permanently affixed improvements, including “luxury” upgrades. Property can be a primary residence, single-family dwelling, townhome, 1¬4 unit multi-family dwelling, second home, or investment property.
If you’ve looked at a HomeStyle Renovation loan in the past, you should be aware that the requirements changed earlier this year. For loans secured any time after February 1, 2022, all renovations must be completed within 15 months.
When it’s time to consider making some changes to your home, reach out to us. We can walk you through the process and help you choose the right rehab loan for your needs.
1 Home Mortgage Alliance is an FHA Approved Lending Institution and is not acting on behalf of or at the direction of HUD/FHA or the Federal government.