When using a renovation mortgage loan to purchase a new home, Fairway will combine the amount of the purchase contract and the necessary repairs and improvements to calculate your adjusted sales price. You can also use a renovation loan to refinance your existing mortgage and finance the costs of your desired repairs and improvements into the new home loan.
If the house is uninhabitable while being renovated, you can finance up to six months of your mortgage payment into the loan to alleviate you and your family from having to make two payments at the same time.
Eligible repairs and upgrades may vary from loan program to loan program, so be sure to ask your Fairway mortgage advisor about all your options when discussing the specific details of your project.
- HomeStyle® Renovation Loans:
- VA Renovation Loans:
- FHA 203(k) Renovation Loans
- USDA Renovation Loans
You can use a Fannie Mae HomeStyle Renovation loan to finance just about any type of upgrades on a primary residence, a second home or an investment property. This even includes some“luxury” items like a brand new in-ground swimming pool. There are no required improvements or restrictions on the types of repairs allowed, nor is there a minimum dollar amount for the repairs. However, repairs or improvements must be permanently affixed to the real property and be completed by a licensed contractor, according to the FannieMae HomeStyle renovation loan guidelines.
In addition to financing the purchase of your new home, an FHA Limited 203(k) can provide up to $35,000 in additional funds for alterations to your new or existing home. Keep in mind that the scope of repairs is limited to minor, cosmetic, non-structural items, such as updating a kitchen or bathroom with new flooring or cabinets, or for purchasing new appliances.
If the home you are considering needs more than $35,000 in repairs and improvements, or if the repairs needed are structural in nature, the StandardFHA 203(k) might be the right solution. The Standard FHA 203(k) option is ideal for more intensive home remodels and can provide additional funds*** to help with eligible repairs, including adding additional square footage.
*** Final disbursement of funds is subject to final inspection
If you are active-duty military, an eligible veteran or a surviving spouse, Fairway has a VA renovation loan option available. An advantage of the VA renovation loan is that eligible borrowers may be able to borrow up to 100% of the future home value*, along with an additional $35,000 in alterations to make minor, cosmetic, non-structural improvements. There are also Conventional renovation loan programs and FHA renovation loan programs out there, for those who are not eligible for a VA home mortgage loan.
If you are not eligible for a VA loan, you may still be able to finance 100% of the purchase and necessary renovation costs with a USDA renovation loan**. Ask your Fairway mortgage advisor what you qualify for today!
*A down payment is required if the borrower does not have full VA entitlement or when the loan amount exceeds the VA county limits. VA loans subject to individual VA Entitlement amounts and eligibility, qualifying factors such as income and credit guidelines, and property limits.
**USDA Guaranteed Rural Housing loans subject to USDA-specific requirements and applicable state income and property limits.
"Loans are what we do, not who we are."- CEO, Steve Jacobson
“Loans are what we do, not who we are.”
– CEO, Steve Jacobson