Unlocking Home Transformation with Renovation Loans

Unlock the potential of your fixer-upper home with a Renovation Loan. This financing option enables you to not only acquire a property but also incorporate renovation expenses into your loan, making your dream home a reality.

What Is a Renovation Loan?
When considering a new home purchase or planning to upgrade your existing one, renovation mortgage loans can be a game-changer. We offer a range of renovation loan options that allow you to finance both your property purchase and the necessary repairs and improvements, streamlining the entire process.

Renovation Loan Highlights:

1. HomeStyle Renovation Loan: Whether it’s your primary residence, a second home, or an investment property, Fannie Mae’s HomeStyle Renovation loan covers it all. You can finance various upgrades, including luxurious additions like in-ground swimming pools. There are no strict improvement requirements or minimum repair costs, but all work must be completed by a licensed contractor.

2. Limited 203(k) Rehabilitation Mortgage: This FHA-backed loan offers up to $35,000 for minor, cosmetic, non-structural repairs and improvements. It’s an excellent option for those looking to update kitchens, bathrooms, or purchase new appliances.

3. Standard 203(k) Rehabilitation Mortgage: If your property requires more extensive repairs exceeding $35,000 or structural enhancements, the Standard FHA 203(k) might be the solution.
It’s ideal for comprehensive home remodels and provides additional funds to address eligible repairs, including expanding your living space.

4. VA Renovation Loan: Available for active-duty military, eligible veterans, and surviving spouses, this option allows financing up to 100% of the future home value, plus $35,000 for minor cosmetic improvements.

5. USDA Renovation Loan: If you’re not eligible for a VA loan, you may still qualify for a USDA renovation loan, covering 100% of purchase and renovation costs.

How Do Renovation Loans Work?

Renovation mortgage loans differ from traditional loans as they allow you to borrow against your home’s subject-to-completion value, factoring in the value added by repairs and improvements. For instance, if you find a home listed at $250,000 but needs $50,000 in upgrades, you can roll both the purchase price and renovation costs into one loan, covering the entire $300,000.

While minimum down payment requirements vary, renovation loans provide an opportunity to finance a significant portion of the total loan amount, making it easier to transform your property into your dream home. Plus, you’re protected from future interest rate increases with a fixed-rate mortgage.

Why a Renovation Loan?

Renovation loans are an excellent choice if your current or prospective home needs repairs or upgrades. Keep in mind that financing renovation costs along with your mortgage amount may result in a slightly higher monthly payment compared to other loan options.

The right renovation loan can turn your current property or prospective purchase into your dream home. Explore your options and reach out to your Mission mortgage advisor to determine the best fit for your unique project and financial goals.

If you have inquiries or require assistance, don’t hesitate to reach out to our team of local mortgage specialists, who are eager to address all your concerns.

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