Construction / Renovation Loan
Construction to permanent loan
Planning to build your dream home? If so, a construction loan may be right for you. Construction loans are short-term, interim loans used for new home construction. We offer a number of construction loans designed to fit nearly every new home construction need. If you’re currently a homeowner, you could also consider using the equity in your existing home to finance your new home construction project.
Low down payment options
Affordability – Interest only payments during construction
Quick draw turn times
Affordability – Interest only payments during construction
Quick draw turn times
Renovation Loan Options
1. Fannie Mae's Homestyle renovation
With a HomeStyle Renovation loan, eligible homebuyers and owners can renovate a home to fit their needs and personal style with just one loan that covers the mortgage and improvements.
When you buy or refinance a home, HomeStyle Renovation allows you to finance improvements for up to 75% of the property’s as-completed value. (That’s the appraised value of the home once the upgrades are completed).
This type of financing can be a more cost-effective way to renovate your home, since it combines the cost of the home and renovations into one conventional mortgage. It also addresses some common financial challenges with purchasing or renovating a home by offering:
Affordability
If you’re a first-time homebuyer or combining HomeStyle Renovation with a HomeReady mortgage, your down payment can be as low as 3%.
Flexibility
HomeStyle Renovation can be used for any renovation project such as updates to an older home, extensive design improvements, and even to construct or renovate additional living spaces like in-law suites and basement apartments.
You can also benefit from upfront draws (this is how contractors get paid for things like permits and architect’s fees) that could help your projects start sooner without you having to spend out-of-pocket.
Simplicity
Renovation funds get bundled into your mortgage under one loan, so you only make one monthly payment.
It’s also important to mention that the renovations you’ll make have the potential to create equity in your home right away.
2. Freddie Mac - Choice Renovation loan
The CHOICERenovation loan is one of several home renovation mortgages buyers can consider. It lets you roll the costs of improving your new home into your monthly mortgage payment.
Guaranteed through Freddie Mac, the CHOICERenovation loan comes with low down payment requirements and other benefits that make buying a home more affordable.
A renovation loan is a smart way to purchase a home that’s in less-than-perfect shape.
First-time home buyers looking for affordable options.
Rural home buyers who have few new homes to choose from.
Senior homeowners who need accessibility improvements so they can age in place.
Multigenerational households that want to customize a home to fit family needs.
Borrowers can finance renovations that cost up to 75% of a home’s value after being fixed up, as long as they qualify for the total loan amount.
3. FHA 203k loan
An FHA 203(k) loan allows you to buy or refinance a home that needs work and roll the renovation costs into the mortgage. You’ll get a loan that covers both the purchase or refinance price and the cost of upgrades, letting you pay for the renovations over time as you pay down the mortgage.
This program is an affordable way to pay for home improvements and may expand your homebuying options. Because 203(k) loans are insured by the Federal Housing Administration, they may offer more lenient qualification requirements than other renovation loans.
Here’s what you need to know about FHA 203(k) mortgages and how to use them to finance home improvements.
- 203(k) limited loan: Provides up to $35,000 for renovations, but major structural repairs aren’t eligible.
- 203(k) standard loan: Renovations must cost at least $5,000, and major structural repairs are eligible. Borrowers using a 203(k) standard loan must hire a HUD consultant to oversee the renovation process.
- Has low minimum down payment and credit score requirements.
- Offers a lower interest rate than credit cards or personal loans.
- Can cover mortgage payments if the home is uninhabitable during renovations
