What is a Renovation Loan?
A renovation loan is a mortgage, just like any other mortgage, but where a regular mortgage is based on the current condition and value of the property, a renovation loan is based on the future value and condition of the property. A renovation loan can be used for either purchasing or refinancing a home and it includes additional funds to complete necessary repairs and/or desired improvements. The loan closes on the property in its current condition, the renovation funds are placed in escrow (like a savings account), work begins immediately after closing, and the money is paid out of escrow as the work is completed. It is a one-time close transaction with one set of closing costs, so once the renovations are completed, there is nothing else you need to do. You just continue to make your regular monthly mortgage payments like any other mortgage. The Renovation Loans are programs that are backed by Fannie Mae (conventional) and FHA (government) and they have the exact same financial qualification requirements as non-renovation loans. Terms of these loans are most commonly set at 30-year fixed rates.
Please complete the form to the right to schedule a call with one of our Renovation Mortgage Specialists. *No credit check or loan application required to get started!*
During this call we will discuss your unique housing goals and evaluate your renovation financing options. We will also gather preliminary information to develop a high-level understanding of your overall financial well-being.
(No documents needed, just a conversation!)