Ron Aponte
There are many options in securing a loan to repair or renovate your new home. It is very advantageous to have the money for home improvement included right in the original mortgage. You do not need to lay out all that cash at once and the expense can be amortized over 30 years at a much lower interest rate than a personal loan would cost. It also makes sense to the lender because the additional money is being used to improve the quality of the home (collateral). One of the more popular renovation loans is the federally-insured FHA 203k loan. Amounts up to 110% of the area median home prices are obtainable. A licensed contractor will write up a plan of action, with improvements to the home specified, as well as costs, of course, and then an appraisal will be done using the improved future value. Meeting all the licensing, inspection, and time constraints imposed by the government on these loans can be difficult. Here at Aceltis, one of our specialties is executing the 203k loan. We have programs designed just for this purpose. Another popular option is the Fannie Mae Homepath Renovation Loan. Terms on these loans are very generous to the buyer. For instance, no appraisals are necessary nor is mortgage insurance required. Amounts up to $35,000 can be added to the mortgage and used for purposes ranging from fixing the roof to upgrading the bathroom to laying out an ornamental rock garden. The main restriction here is that these loans are only available on Fannie Mae REO properties, i.e., foreclosure sales.
A related loan to Homepath is called Homestyle. These are for Fannie Mae properties and follow similar guidelines. At Aceltis, we’ll guide you through the web of guidelines, rules and processes so that you can achieve your end goals in the most efficient way possible. Put us to the test!