Do I have to pay PMI on my renovation loan?

By
Home Inspector with 203kOnLine.com, covering the USA S0289

Yes, and NO. 

Yes if you are going with the FHA 203k program, and NO if you are going with the Fannie Mae HomeStyle Renovation program.

If your client it purchasing a home or refinancing a home and wanting money to make improvements and has that little extra down payment and good credit the HomeStyle Renovation program is by far a better program for your client. 

PMI can be a major monthly expense but if your client has poor credit or just doesn't have the larger down payment it may be a necessary evil. I hear the PMI can be $400-600 more per month. 

In any case if you should have to use the FHA program you will likely refinance your client out of that PMI as soon as possible after the loan has seasoned a bit.

In any case these programs are both excellent to provide money for renovations or needed repairs to a home that otherwise wouldn't be able to be financed.

Posted by

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Comments (2)

Bill Reddington
Re/max By The Sea - Destin, FL
Destin Florida Real Estate

I know the FHA 203 K programs can be terrific. We just don't have that many FHA loans that happen in this area. Thanks for the tips.

Jul 06, 2014 02:05 PM
Mike Young
203kOnLine.com, covering the USA - Las Vegas, NV
FHA 203k Consultant 916-758-1809

Bill, I understand what you are saying but have to tell you that unless you are inside the beltway on this one, you are likely missing out. Everyone I talk to thinks they aren't going on in their area. I had a guy in Portland OR tell me that when the next guy I showed what was happening he was able to get 200 going his first year. It is a "sleeper" but an essential tool for those in the know.

Jul 07, 2014 01:21 AM