Is a Renovation Loan Right for You?

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Whether your home improvement projects are large or small, a home renovation loan from HomeBridge Financial Services may be right for you. With a home improvement loan, you’ll be able to finance simple upgrades, remodeling or more complex renovation projects, and everything in between. Monthly payments on home renovation loans are typically lower than credit cards or personal loans and, in some cases, financing may even be tax deductible*. If you’re considering a home remodel, here is more information about home remodeling loans and what they can do for you and your home.

Renovation Loans: Features & Benefits

Making significant home improvements such as adding an extra room or replacing the roof not only makes a difference in how much you enjoy your home, but it can improve its overall value as well. If you aren’t happy with some aging features of your house, consider using a home renovation loan to transform your living space into the home you’ve always dreamed of. Similarly, home improvement loans can help buyers who decide to purchase a fixer-upper home that requires a significant amount of home remodeling.

Although you may be able to pay for home improvements with a personal loan or other types of financing, these methods have higher interest rates and monthly payments. With a renovation loan, you’ll be able to finance a construction period of up to six months with only one set of closing costs and absolutely no prepayment penalty. While the total loan amount is based on the property’s appraised value once the repairs are complete,** the down payment requirement is just 3.5 percent.

Eligibility for a Renovation Loan

Whether you’d like to update your home’s features, make a home more accessible, or buy a short-sale home and make improvements, you may be eligible for an FHA 203(k) home renovation loan from HomeBridge. Since the loan is intended for current homeowners or potential buyers who wish to improve their home, the loans are not available to investors. If you currently live in the property, or plan to once renovations are complete, you should speak with a lender today to decide if you’re eligible for the loan.

Fortunately, many types of homes are eligible, including single-family residences (SFRs) and homes in planned unit developments (PUDs). Although some restrictions apply, you can use a 203(k) renovation mortgage from HomeBridge to finance renovations on condos1, two-to-four unit properties, and mixed-use properties as well2. Depending on your case, either the FHA Limited 203(k) loan or the “Standard 203(k)” Consultant K loan may be better for your situation, so speak with a lender today about your unique situation.

Renovation Loans from HomeBridge

HomeBridge is one of the top home renovation loan lenders in the nation. According to data from the Department of Housing and Urban Development (HUD), HomeBridge ranks No. 1 in the nation for originating FHA 203(k)# Renovation Loans. If you’re interested in learning more about home renovation loans, our Mortgage Loan Originators are ready and eager to discuss the details of this helpful home-financing solution with you.

*Please consult a tax advisor for further information regarding the deductibility of interest and charges.

**For 203(k) purchase transactions the maximum loan amount is the lesser of the sales price + renovation costs or 110% of the after improved value, times the maximum LTV.  For refinance transactions the maximum loan amount is the lesser of the property value before renovation + renovation costs or 110% of the after improved value, times the maximum LTV.  Loan amount must be within FHA county loan limits.

#As of September 2016

¹Only interior work is allowed for condos and the maximum loan amount is based on 100% of the after improved value.
²Mixed used properties are allowed providing all square footage guidelines are met.

The above content is for general informational purposes only and is not provided as professional advice for your specific situation. Please speak to a Mortgage Loan Originator to discuss loan options available.