Renovations Loans
A renovation loan is a type of mortgage that allows borrowers to finance both the purchase of a home and the cost of renovations or repairs into a single mortgage. This loan program is designed to help homebuyers or homeowners looking to buy or refinance a property in need of repairs or upgrades.
Homestyle Renovation Loan
This loan program is specifically intended for purchasing a home that needs repairs or for refinancing an existing mortgage to finance renovations or improvements to the property.
The loan amount can cover the cost of the home purchase or the current mortgage balance, plus the estimated cost of renovations. This allows borrowers to finance both the property and the renovation expenses with one loan, potentially with a down payment as low as 3%.
The loan can cover a wide range of renovations, repairs, or improvements, including structural changes, remodeling kitchens or bathrooms, adding rooms, or making the home more energy-efficient or accessible.
Borrowers must work with licensed contractors for the renovations. The lenders typically require detailed project plans, specifications, and bids from contractors to approve the loan.
FHA 203(k) Renovation Loan
The FHA 203(k) loan is a program offered by the Federal Housing Administration (FHA) designed to help homebuyers or homeowners finance both the purchase and renovation of a property through a single mortgage.
Standard 203(k) loan: This loan is suitable for major renovations or structural repairs with a minimum cost of $5,000. It covers structural alterations, room additions, and major repairs.
Limited 203(k) loan: This loan is more suitable for minor upgrades and repairs with a maximum cost of $35,000. It covers non-structural improvements like kitchen or bathroom remodeling, flooring, painting, and appliance replacements.
The property must meet certain FHA requirements and be eligible for the program. A down payment of at least 3.5% of the total loan amount is typically required.
Borrowers must work with licensed contractors for the renovations. The lenders typically require detailed project plans, specifications, and bids from contractors to approve the loan.
VA Renovation Loan
VA renovation loan, also known as a VA Rehabilitation Loan, is a mortgage option offered to eligible veterans, active-duty service members, and certain members of the National Guard and Reserves.
Renovation loans allow borrowers to finance both the purchase price of a home and the cost of renovations or repairs into a single loan. This streamlines the process and reduces the hassle of dealing with multiple loans and closings.
No Down Payment (in Many Cases): Like other VA loans, renovation loans often require no down payment or a minimal down payment, making homeownership more accessible for veterans and service members.
Overall, the VA renovation loan offers a valuable opportunity for eligible veterans and service members to finance home purchases and renovations with favorable terms and conditions, ultimately helping them achieve their homeownership and housing improvement goals.
Borrowers must work with licensed contractors for the renovations. The lenders typically require detailed project plans, specifications, and bids from contractors to approve the loan.
It's essential to work with a lender experienced in Renovation loans and to understand all the terms, conditions, and eligibility criteria before applying. Additionally, consult with contractors and get accurate estimates for the renovation costs to ensure the loan amount covers all necessary expenses.
Give us a call at (337) 267-8511 to learn more
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Lafayette, LA 70503
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