Conventional Renovation Loan

Buying a house that needs rehabilitation can often be complicated and costly. Repairs can drain your savings or investments. 

Interim acquisition and improvement loans often have: 

• Relatively high interest rates 
• Short repayment terms 
• A balloon payment 

Coupling a conventional rehab loan with a lender with industry knowledge, you may benefit from lower mortgage interest rates and reduced costs associated with repairs and modernization. 

You can customize the home to meet your needs. Improvements may also increase home value and resale marketability.

Unlike traditional home equity loans that base the loan amount on your home’s current equity and can limit the available money for home repairs.

In a HomeStyle or CHOICERenovation refinance, the loan amount can be based on the home’s future value once the renovations and repairs you have chosen are completed. You are borrowing on future equity to achieve the home of your dreams!

There’s no need to worry about post-closing costs like inspections, permit fees, architectural or engineering drawings, and the supplemental origination fee.

These fees can be financed into your renovation loan. You’ll also have the security of a contingency reserve. Once you start your project, we know you may uncover additional health or safety repairs that need to be done. We’ll build an additional 10 to 20% of your bid cost as a contingency reserve to use as a safety net. 

Another benefit of the Fannie Mae HomeStyle or Freddie Mac CHOICERenovation loan options is you can finance up to 6 months of mortgage payments into the loan if it’s not possible to live in the home during renovations, to be determined by a HUD Consultant. That way, you can simultaneously avoid paying your mortgage and rent at a temporary residence.