There are two market conditions making renovation loans a hot item. First, current foreclosure sales are running six times higher than normal in the U.S., and many of these homes have been neglected and are in need of repair. Second, many homeowners are deciding to stay put and upgrade their homes.
The Federal Housing Administration (FHA) 203K renovation loan provides the financing to both purchase the home and finance the home's renovation with a single loan. The loan can also be used to refinance and make repairs on an existing home. In either case, the property must be an owner-occupied, primary residence.
Other factors make renovation loans very attractive. The down payment can be as low as 3.5%. Record-low mortgage interest rates offer a significant advantage over high-interest credit cards when it comes to paying for home improvements.
Renovation loans are also very convenient. With one loan, there's only one application, one set of fees, one closing and one monthly payment. At closing, the repair money is put into a special account for disbursement as repairs are completed.
Only a limited number of lenders offer 203K financing. If you would like more information about our dynamic and industry-leading renovation loan program, please call me today!