What options are out there for homeowners or buyers who want to renovate and add value to their property?

There are two home renovation mortgage programs available to homeowners or buyers who wish to add value to their property and renovate. A renovation loan is also considered a conventional loan.

Fannie Mae and the Federal Housing Administration have home renovation mortgage programs that allow buyers to borrow based on what the house is expected to be worth after the home renovation is completed. Homeowners can also use either program to refinance their existing mortgage plus the renovation costs into one loan.

These programs are:

1. FHA’s 203(k) 

2. Fannie’s HomeStyle Renovation

2. Fannie’s HomeStyle Renovation

Types of renovation to qualify for an FHA’s 203(k):

  • Structural alterations and reconstruction
  • Modernization and improvements to the home’s function
  • Elimination of health and safety hazards
  • Changes that improve appearance and eliminate obsolescence
  • Reconditioning or replacing plumbing; installing a well and/or septic system
  • Adding or replacing roofing, gutters, and downspouts
  • Adding or replacing floors and/or floor treatments
  • Major landscape work and site improvements
  • Enhancing accessibility for a disabled person
  • Making energy conservation improvements

What Fannie’s HomeStyle Renovation offers?

A convenient way for borrowers to make renovations, repairs, or improvements totaling up to 50 percent of the as-completed appraised value of the property with a first mortgage, rather than a second mortgage, home equity line of credit, or other, more costly financing method. Eligible borrowers include individual home buyers, investors, nonprofit organizations, and local government agencies.

These loan programs offer both Fix-rate and Adjustable Rate Mortgages (ARM).

What are fixed-rate mortgages and adjustable-rate mortgages (ARMs)?

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Items we need from you

  • ID’s – Need 2 forms of ID from the list below for each borrower
    • Driver’s License –a good copy so we can read the numbers
    • Social Security Card(s)
    • Visa’s
    • Immigration/Green Card
    • Other forms of Identification may be used, contact our office for more information
  • All Credit Card Statements – Last 2 months, ALL Pages even if they are blank
  • Bank Statements – All accounts – Last 2 months, ALL Pages even if they are blank
  • Retirement Accounts/Statements – Last 2 months, ALL Pages even if they are blank
  • Divorce Decree – if needed
  • Divorce Settlement – if needed
  • VA Eligibility (VA loans only)
  • Deed/Mortgage
    • Mortgage Statements – Last 2 months, ALL Pages even if they are blank
    • Closing Statements
    • Leases
    • Home Owners Insurance
    • Property Taxes
    • HOA Statement and payment history showing dues are paid up to date
  • Paystubs – Last 2 months (if you are paid bi-weekly, we will need all 4)
  • W-2’s – Last 2 years
  • 1099’s – Last 2 years
  • Tax Returns – Last 2 years, ALL Pages, even if they are blank
  • Sales Contract/Purchase Agreement
  • Other additional disclosures may be required depending on personal financial circumstances