Transforming Houses into Dream Homes

Renovation Mortgage Loan Highlights

FHA 203k and Fannie Mae HomeStyle mortgages are types of home improvement loans that allow borrowers to finance the cost of renovations and repairs along with their mortgage. Both types of loans require the borrower to have a good credit score and a steady income.

• FHA 203k loans are insured by the Federal Housing Administration, while Fannie Mae HomeStyle mortgages are backed by Fannie Mae.
• Both loans have loan limits that vary by location and are determined by the local housing market.
• Both types of loans require borrowers to work with a licensed contractor and submit detailed renovation plans and cost estimates before the loan can be approved.
• FHA 203k loans have two different types of loan programs: the Standard 203k, which is for larger renovation projects, and the Limited 203k, which is for smaller projects.
• Fannie Mae HomeStyle mortgages allow borrowers to finance up to 50% of the after-renovation value of the property.
• Both types of loans allow borrowers to include a contingency reserve in their loan, which is a fund set aside for unexpected costs that may arise during the renovation project.
• The FHA 203k loan requires a minimum down payment of 3.5%, while the Fannie Mae HomeStyle mortgage requires a down payment of at least 5%.

Overall, renovation loans can be a useful tool for homeowners looking to finance a home renovation project. However, it's important to understand the eligibility requirements, costs, and process before applying for a loan, and to carefully consider the costs and benefits of the renovation project itself.