Renovation Loans For Every Project New or Owned!

A "fixer-upper" refers to a distressed property that is in need of updating or renovating. Usually theses homes will have system and structural issues, but they will always cry for cosmetic updates. It can be hard work taking on a distressed property. However, it is also an opportunity to build generous equity on your investment, increasing your net worth. This is one way home owners earn wealth. If you’re considering purchasing a fixer-upper property, ask your lender if you qualify for one of the renovation loans below, see exhibit 1.4.

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Renovation Loans

Minimum Credit Score

Minimum Down Payment

Overview

FHA 203(k)

620

3.5%

Also known as a “Renovation loan”. Allowing buyers to finance the property and rehabilitation through a single mortgage.

Fannie Mae Homestyle

620

5%

A conventional rehab loan that allows you to borrow up to 105% from the ARV, or After Repair Value of the property.

Home Equity (HELOC)

620

20% Equity

Similar to a credit card; you can borrow from your home’s equity. This loan will be added to your existing mortgage. It is sometimes referred to as a “second mortgage”

Cash-out Refinancing

620

20% Equity

This loan is available for homeowners that have paid off their home or the home value exceeds the mortgage balance. It is a replacement to your original mortgage. You may also recei