Fairway Independent Mortgage Corporation offers renovation home loan options that provide the financing for your dream home plus financing for the improvements needed!
Replace your roof plumbing and electrical or add new flooring repaint and update your kitchen and bathrooms. If your current or future home is in need of repairs, we can help you fix it up!
| LIMITED 203K | STANDARD 203K | Home Style | |
|---|---|---|---|
| ELIGIBLE REPAIRS | Non-structural | Structural and non-structural | Structural and non-structural |
| INSTALLATION OF IN-GROUND SWIMMING POOL | Not allowed | Not allowed | Allowed |
| MAX ALLOWABLE TOTAL RENOVATION BUDGET | $35,000 | No limit to max FHA loan limits | Purchase: Lesser of 75% of total
acquisition cost or as-completed
appraised value Refi: 75% of the as-completed value |
| FICO | 620 | 620 | 620 |
| TEARDOWN | Not allowed | Allowed (foundation to remain intact) | Not allowed |
| PRIMARY RESIDENCE PURCHASE DOWN PAYMENT AND LTV* | 3.5% (96.5% LTV) | 3.5% (96.5% LTV) | 3% (97% LTV) for first-time homebuyers 5% (95% LTV) for non-first-time homebuyers |
| PRIMARY RESIDENCE REFINANCE LTV | 97.75% LTV | 97.75% LTV | 97% LTV if FNMA loan pay-off 95% LTV if non-FNMA loan pay-off |
| ELIGIBLE PROPERTY TYPES | 1- to 4-unit primary residence | 1- to 4-unit primary residence | 1- to 4-unit primary residence 1- to 4-unit investment property 1-unit second home |
| ADVANCES AT CLOSE AND MATERIAL DRAWS | 50% of the total bid can be advanced at close of the loan | No advances and no material draws | 50% of materials budget can be disbursed after close |
| DRAW HOLDBACKS | No holdbacks on draws | 10% holdback on all draws except final draw | 10% heldback of the total bid paid out with final draw |
| RENOVATION COMPLETION TIME | Within 6 months of the close date | Within 6 months of the close date | Within 6 months of the close date |
| BORROWER RELATED TO CONTRACTOR | Nat allowed | Nat allowed | Allowed |
With a renovation loan, you can roll the cost of financing or refinancing a home and repairs into one loan – saving you time and money.
Turn a Fixer Upper into Your Dream Home
Home Style Renovation Loan
You can use a HomeStyle renovation loan to cover costs of repairs. remodels. renovations or energy-efficient improvements on a primary residence. a second home or an investment property. There are no required improvements or restrictions on the types of repairs allowed or a minimum dollar amount for the repairs. However, repairs or improvements must be permanently affixed to the real property. add value to the property. and be completed by a licensed contractor.
Limited 203(k) Rehabilitation Mortgage
In addition to funding your new home. an FHA Limited 203(k) can provide up to $35.000 (including a contingency reserve) in additional funds to help make a few non-structural repairs or renovations such as updating a kitchen or bathroom. adding new flooring. purchasing new appliances. or repairing the roof.
Standard 203(k) Rehabilitation Mortgage
If your potential dream home needs more than $35,000 in renovations or the repairs are structural, the Standard FHA 203(k) might be the right solution. This program removes the restrictions of the limited option to allow for major home remodeling. A Standard FHA 203(k) can provide additional funds’ to help with eligible repairs including moving or removing walls. minor pool repairs, and landscaping.
*Final disbursement of funds is subject to final inspection.
When it comes to renovation financing, there are more cans than cannots. White a Limited 203K is intended to remedy cosmetic deficiencies and maintain a total renovation budget of less than 35,000, the Standard 203K can support a project as robust as a teardoen and rebuild. Similarly, the HomeStyle renovation loan requires repairs that add value, are permanently affixed and do not exceed 50% of the after-improved value. Want a pool? You got it! An addition? We can do that too! Replace all mechanicals and upgrade flooring? There’s a renovation loan for that.
Remember, renovation loans cannot improve shared space of attached properties, increase unit count or complete new construction homes.
In addition to the sales price, renovation loans use the after-improved value to finance what are called hard and soft home improvement costs into the loan amount. Your hard costs include bid, contingency reserve and ant escrowed mortgage payments the borrower elects to finance. Closing costs are not necessarily higher on a renovation loan. Renovation Soft costs are not closing costs.
Since Fairway Independent Mortgage Corporation’s certified Loan Officers provide exemplary renovation expertise, you can relax knowing we’ll walk you through the entire process, making it as smooth as possible.
The 203K products follows FHA guidelines and require that homeowners occupy or escrow occupancy mortgage payments within 60 days of loan closing. The HomeStyle, however, allows prospective and current homes and investment properties in addition to the typical primary occupancy.
The Limited 203K product has a of benefits including a 50% draw of eligible contractor funds at the closing table. However, there are qualities that make the product more difficult for prospective homeowners, especially when they are a first-time homebuyer. These difficulties include a limit on the cost and scope of projects, additional paperwork and higher expectations for the contractor’s written work narrative. The Standard 203K and homeStyle allow homeowners to finance the cost of a HUD consultant, who will outline the project in the agency-required format and deliver a fair representation of project scope and cost requirement.
Delays usually only exist when the costs and projects change mid-transaction. In the case of any home loan closing, proper expectations, deadline awareness and communication are the key to on-time closing. Well-qualified borrowers with eligible contractor and a firm renovation direction at the time of offer generally close within 35 days of the loan application.
