Need to make renovations or repairs to home?
Consider the FHA Renovation Loan Program.
FHA renovation loans are a type of loan offered by the Federal Housing Administration (FHA) that allows borrowers to finance the cost of home renovations and repairs into their mortgage. These loans are a popular option for homebuyers who want to purchase a home that needs some work, as they provide a way to finance both the purchase of the home and the cost of the necessary renovations in one loan.
FHA renovation loans can be used for a variety of home improvements, including structural repairs, room additions, and energy-efficient upgrades. Some of the common repairs that can be financed through these loans include roofing repairs, plumbing and electrical work, flooring replacements, and kitchen or bathroom remodels.
One of the main benefits of FHA renovation loans is that they allow borrowers to finance the cost of the renovations into their mortgage, which can be more cost-effective than taking out a separate loan or using a credit card to pay for the repairs. This can also be a convenient option for homeowners who want to make improvements to their home but don't have the cash on hand to pay for them upfront.
Another advantage of FHA renovation loans is that they can be easier to qualify for than other types of home improvement loans. Because they are backed by the FHA, these loans often have more lenient credit requirements than traditional home improvement loans, making them accessible to borrowers with lower credit scores or limited credit histories.
There are two types of FHA renovation loans: the 203(k) Standard loan and the 203(k) Streamline loan. The Standard loan is designed for larger renovation projects, such as major structural repairs or room additions, while the Streamline loan is intended for smaller renovations, such as kitchen or bathroom remodels.
To qualify for an FHA renovation loan, borrowers must meet certain requirements, including a minimum credit score of 580 and a down payment of at least 3.5% of the purchase price of the home. Borrowers must also use the loan to finance repairs that are necessary to make the home habitable, and the renovations must be completed within six months of closing on the loan.
In conclusion, FHA renovation loans can be an excellent option for homebuyers who want to purchase a home that needs some work or for homeowners who want to make improvements to their current home. These loans allow borrowers to finance the cost of the renovations into their mortgage, making it a convenient and cost-effective option.
If you are considering an FHA renovation loan, please reach out to us here:
Lawhorn & Associates Mortgage Co.
100 Jefferson St., South, Suite 100B
Huntsville, Al 35801
(256) 539-0555 (office)
(256) 337-3700 (Cell)