The Facts About FHA 203k and HomeStyle Renovation Loan Options in Texas
The facts out there about FHA 203k loans and Renovation Loans in general just need to be clarified. It’s easy to hear about what’s wrong or what’s hard about the loan, but instead let’s talk about why FHA 203k loans are great! Some fun and interesting facts associated with FHA 203k and the Fannie Mae HomeStyle Reno vation loans.
Facts You May Not Know About 203k and Renovation Mortgages
Did you know that buyers are not alone on any renovation project?
We are always there but even more reassuring is that we have a Consultant on both the FHA 203k and the Fannie Mae HomeStyle Renovation loan. There is always someone there to keep communication lines open.
Think of the Consultant as a mini project manager. He/She is someone who will complete the initial feasibility study but also there to assist with the draws, inspections and should the need arise help solve any disputes. Having a Consultant on any renovation project adds a safety net and ensures that the project is being managed to a successful completion. To check out more about the consultant and fees etc please see the HUD website.
Did you know that pools can be added with the Fannie Mae HomeStyle loan?
Well if you didn’t, now you do! Summer is right around the corner, so why not enjoy a new pool in your backyard. Pools can be installed or repaired under the HomeStyle loan. There is no limit except for the conforming loan limit of $417,000! Under the FHA 203k loan everything surrounding the pool can be revamped, but the pool repair itself is limited to $1500. In some cases with the FHA 203k loan borrowers decide to fill in the pool vs repair the pool and that is just fine by FHA guidelines.
Maybe you don’t have or need a pool but want to spruce up your backyard…maybe even add an outdoor kitchen.
All is allowed with the FannieMae HomeStyle loan …as long as the house appraises to be worth the renovations that are being added.
With the housing shortage we are seeing more and more clients use the HomeStyle loan to refinance their current mortgage and add funds to landscape, build a deck, get their pool into working order and install a built-in grill with all the extras – granite counters, plumbing and sink, etc.
Did you know that we can write FHA loans down to a 600 FICO?
It’s true…there are some additional guidelines to follow so it’s best to call and let us talk to you about your situation. The biggest thing we want to check is the debt ratio and the reserves but the overall credit profile will be reviewed as well. At 600 the down payment is still 3.5% but if you are at a 580 FICO and meet the requirements you could get an FHA loan with 10% down. There are plenty of choices!
Calling all investors!
Did you know that the HomeStyle Renovation loan allow for investors?
Well it does! The down payment is going to be 20% and you will be limited to four financed properties. Currently single family homes and condos are eligible to be purchased and renovated by an investor.
As you can see the list of possibilities are endless. When asked why one program over another well it really comes down to two things…which program does a borrower credit qualify for and which program allows for the type of renovations the buyer is wanting to do to the property. I am happy to discuss your specific project ideas for any property whether purchasing or refinancing. Give us a call today!