Purchase / Fix Up
The purchase of a home with a Renovation Loan allows the homeowner to add a budget for renovation costs to the purchase price of the home. After close, the funds are used to complete planned improvements to the home. This is perfect in today’s market where many homes are aging, missing appliances or do not fit your families needs or taste.
Homes needing repair are not eligible for purchase with FHA or Conventional loans because of their condition. An FHA 203k Renovation Loan is perfect!
A 203k loan allows you to purchase with an FHA loan, and includes a budget for costs to to repair, renovate, and customize your new home.
- Loan amounts up to 96.5% of the improved value of the home
- Estimates for the work to be completed must be obtained and approved as part of the loan process prior to closing
- Work must be completed within 6 months
- Renovation budget must include a 10%-20% contingency reserve depending on the type of work
Cost of a 203k renovation loan include costs associated with any FHA loan
- Up front mortgage Insurance of 1.75% (can be added to loan amount above the County limits)
- Monthly mortgage insurance 1.1% to 1.2% (0.250% higher for loans > $625,500)
Additional costs include inspection fees, appraisals, title inspection, etc.