A Renovation loan might be right for you.
I have noticed lately when working with Florida home buyers in Pinellas, Hillsborough and Pasco Counties, that home prices have increased in value over the last few years making it more challenging for buyers to find exactly what they are looking for in their price range. In the Tampa Bay area, especially as you get closer and closer to the water, many of the homes are older and in desperate need of renovations. While they may not look like my buyer’s “dream home” in it’s current condition, often times I know that it is exactly what my buyers are looking for, but they just can’t see it in front of them. My 25 years of experience renovating homes with my husband Dan has given me a knack for visioning the end product that allows me the opportunity to share that vision with my buyers. As a certified New Home Sales Specialist and being Residential Construction Certified, I also know a lot about the construction process and what type of products are used in today’s building materials. A renovation loan was what I was able to use for my latest remodel and it just might be the solution for you as well.
These types of loans allows the buyer to roll the cost of financing a home, repairs and updates all into one loan – potentially saving you time and money.
There are a few different types available and have different down payments and qualifying criteria.
A HomeStyle renovation loan – Will 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 the renovations are expected to be 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.
The additional funds needed for repairs are rolled into the total loan amount but the funds are not distributed directly to you, the borrower, at closing. They are held over in an “Escrow” account, you are assigned a funds coordinator from the lending institution and then they work closely with you and the contractors to ensure that a smooth and timely transaction can occur once the renovation is approved.
Please feel free to reach out to me for further information regarding these types of Florida home loans. I have personally used these types of loans before and can highly recommend them and a lender as well.