Loan programs · Florida, Ohio & Texas
Buy it and fix it, in one loan
Available in Fort Myers, Cape Coral, Naples and across Florida · Dallas, Fort Worth, Houston, Austin, El Paso and across Texas · Columbus, Cleveland, Cincinnati and across Ohio
A renovation loan finances the purchase of a home and the work it needs in a single mortgage, based on what the house will be worth once the work is done. It is the answer for the house that is right in every way except its condition, and it is also how a homeowner funds a major remodel without a second loan.
The main programs are the FHA 203(k), Fannie Mae HomeStyle and Freddie Mac CHOICERenovation. They differ in down payment, in who can use them and in what the money can pay for. I broker all of them, so we pick the one that fits the project instead of forcing the project to fit one lender.
You get a bid from a licensed contractor before closing, the appraiser values the home as if the work were already done, and the loan is sized to the purchase price plus the renovation budget. After closing the renovation money sits in an escrow account and is paid out to the contractor as inspections confirm each stage is complete.
The FHA 203(k) comes in a Limited version for smaller, non-structural jobs and a Standard version for larger projects that require a consultant to oversee the work. HomeStyle and CHOICERenovation are the conventional equivalents, and they allow things FHA does not, like certain luxury items and investment properties.
The part people underestimate is time. The contractor bid, the consultant and the draw inspections all add steps compared with a normal purchase. In Southwest Florida, where storm-damaged and dated inventory sits on the market at a discount, that extra work is often exactly why the house is a good deal.
The purchase and the work are financed together, so you are not stacking a second loan or a credit line on top of a mortgage.
Everything from minor repairs to major structural work, depending on the program and the property.
Buyers looking at a house nobody else wants because of its condition, which is often the best value on the street once the work is done.
FHA 203(k) for buyers who want the lower down payment. HomeStyle and CHOICERenovation for buyers with stronger credit, investors and projects FHA will not cover.
Whether this is the right program depends on your situation, the property and current guidelines, which change. That is the conversation to have before you start looking, not after you have found the house.
Good fit
Look elsewhere
I’m a broker. If your loan doesn’t fit one lender’s box, I’m not out of options. I shop it. And when it fits everywhere, they compete for it.
Questions
Repairs, updates and improvements that add value or make the home livable: roofs, kitchens, baths, flooring, systems, additions and, on some programs, structural work. Each program has its own list of what is allowed, which we go through before you make an offer.
Yes. The work has to be done by a licensed contractor who provides a written bid and gets paid through the escrow draw process. Doing the work yourself is generally not allowed.
No. The FHA 203(k) is for anyone buying or refinancing a home they will live in. The conventional renovation programs also allow second homes and, in some cases, investment properties.
The appraiser values the home based on the completed work described in the contractor bid. That after-improved value is what the loan is based on.
Yes. All three programs allow a renovation refinance, which is how many homeowners fund a remodel without a second mortgage or a credit line.
Not a commitment to lend. All loans subject to credit approval and underwriting on a complete file. Program availability and guidelines change, so confirm current terms before relying on them. Equal Housing Opportunity.
