FHA 203K / Homestyle

FHA 203(k) and Fannie Mae HomeStyle Renovation loans allow qualified borrowers to finance a home purchase or refinance while including eligible renovation costs in the mortgage. Covered improvements may include roofing, plumbing, electrical work, heating, air conditioning, flooring, and other approved repairs.

Benefits

• Available for eligible home purchases and refinances
• Renovation costs may be included in the mortgage
• Financing may be available for structural and non-structural improvements
• Eligible properties may include single-family homes, townhomes, condominiums, and certain multi-unit properties
• Loan amounts, improvements, and properties must meet program and lender requirements

Eligibility

Renovation plans, contractor estimates, property eligibility, and the proposed work must be reviewed and approved by the lender. Contractor and consultant requirements depend on the selected renovation program and scope of work.

Dennis and his wife Margie need more space in their home. The plan is to have Dennis’s mom move in with them, to take care of their new addition – a baby girl.

The Problem

Dennis and Margie wanted to upsize their home in order to make room for their growing family, but home prices were all too expensive so they decided to build an addition to their home instead. To pay for their addition, they didn’t want to pay with credit card because of high interest rates, and they did not have enough cash to pay for the construction outright.

Our Approach

Renovation loans such as the Fannie Mae HomeStyle Renovation mortgage and FHA 203(k) loan may allow qualified borrowers to purchase or refinance a home while including eligible repair and renovation costs in the mortgage.

Results

Dennis and Margie were able to finance an addition, a new roof, and a kitchen remodel through their renovation mortgage. Their final payment was based on the approved loan amount, interest rate, and loan terms.