Mortgages for Buying and Improving a Home

April 24, 2020 Mortgage Refinance,Mortgages


Interested in buying a fixer-upper? There are several different methods of acquiring a renovation loan, but two federally backed renovation mortgage programs will allow you to do a combined purchase and repair mortgage loan – the FHA 203(k) loan and the Fannie Mae Homestyle Renovation mortgage. They are perfect for rehab work on foreclosed properties, and also may be used to combine renovation and refinancing of your existing home.

For 203(k) eligibility, the home must be from single-family up to four-family occupancy and construction must have been completed for at least one year. FHA loans are intended for residents and not investors, but Homestyle loans may also be used for investment properties. Both types can be used for refinancing as well as purchasing.

FHA loans allow lower down payments and larger loan amounts. The loans follow typical FHA guidelines, with minimum down payments of 3.5% and loan limits determined by regional guidelines (typical limits are…

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