A home renovation mortgage is a great way for a borrower to purchase or refinance a property and wrap the costs of repairs and improvements into one loan. There are two types of renovation mortgage programs available depending on the amount of work that needs to be done: FHA 203K (streamlined k) and Conventional Renovation Program (standard k).

 

A Renovation Mortgage allows for one mortgage application, one mortgage transaction, and one mortgage payment. With a Renovation Mortgage the borrower can make repairs and improvements without having to take out a higher interest second mortgage or equity line of credit. The loan amount for a Renovation Mortgage is determined by the anticipated value of the property once the repairs are complete.

 

Properties that qualify for a Renovation Mortgage

 

·        Single Family Residences

·        1-4 unit dwellings

·        Mixed use

 

*Please keep in mind properties must be at least one year old, and must be used as a primary residence by the borrower.

 

Repairs that qualify for a Renovation Mortgage

 

·        Elimination of health and safety hazards

·        Cosmetic enhancements exterior and interior

·        Repair/replacement of Air Conditioning

·        Roofing

·        Windows

·        Landscaping

·        Room Additions

 

 

Qualifying standards for a Renovation Mortgage are the same for a traditional FHA Mortgage or Conventional Mortgage.