Home Renovation Loans In Colorado

Home improvement loans are types of mortgages with built-in funding for repairs. They are used to finance a residence’s renovation, remodeling, or repair. These loans are frequently mortgages with additional funds for home enhancements, allowing homeowners to borrow against the home’s future value.

Home Renovation Loan Programs

Different types of home renovation loans are available in Colorado, each with unique guidelines and eligibility requirements. Here are the most common home renovation loans:

• FannieMae HomeStyle

Popular among home improvement loans is the HomeStyle Renovation loan, which provides financing for a wide variety of repairs and improvements. This loan can be used to gut and renovate the interior, including the kitchen and restrooms.

A Fannie Mae Homestyle loan is a conventional mortgage that offers lower-interest financing for remodeling costs. It combines a purchase loan and a home improvement loan. Borrowers can use the loan to purchase a property that requires repairs and pay for the renovation expenses with a single mortgage loan, making it a simple financing choice.

The Fannie Mae Homestyle loan can be used for various remodeling projects, such as energy upgrades, landscaping, and luxury upgrades, as well as restoring older homes to their former splendor. The Homestyle loan can also fund the purchase of manufactured homes.

Borrowers with a minimum credit score of 620 are often eligible for a Fannie Mae Homestyle loan. While this minimal score exceeds the 580 required for an FHA 203k loan, the Homestyle loan offers significant advantages in the long run, making it the superior alternative for qualified borrowers.

• FreddieMac ChoiceRenovation

The Freddie Mac ChoiceRenovation loan is a mortgage product that enables customers to fund home modifications and renovations with a single loan and closing rather than two separate loans. Borrowers can use the ChoiceRenovation loan to buy and renovate a home in one easy step, covering up to 100% of the renovation costs.

Typically, consumers need a credit score of 620 or above to be eligible for a Freddie Mac ChoiceRenovation loan. Additionally, borrowers must show their ability to repay the loan and submit proof of their income, employment, and assets. 1-4 unit primary residences, 1-unit second houses, 1-unit investment properties, and mobile homes are all eligible for the loan.

The ChoiceRenovation loan has a unique feature in that it is based on the property’s “after renovation value,” which means that borrowers may qualify for a more considerable loan amount based on the home’s improved value after the renovations. 

• FHA 203k

An FHA 203k loan is a government-insured mortgage allowing borrowers to get a single loan for home purchase and renovation. This loan is intended to assist borrowers in financing an older property that requires extensive repairs. The FHA 203k loan can be utilized to buy or refinance a fixer-upper and fund the necessary renovations.

A minimum credit score of 580 is required to qualify for an FHA 203k loan, and a down payment of 3.5% is required for individuals with a credit score of 580 or more, while those with a lower score must put down 10%. Repairs and improvements must be made by a contractor rather than the borrower. The borrower must additionally provide a thorough proposal of the work they wish to perform.

There are two types of 203k loans, standard and limited. A standard 203k loan is used for large-scale rehabilitation projects costing over $35,000. This loan is designed to fund substantial upgrades, structural repairs, remodeling, the addition of a new garage, or landscaping. The loan can be used to purchase a home that requires significant repairs or to refinance an existing mortgage to cover the costs of the improvements.

The Limited 203(k) program lets purchasers and homeowners finance from $5,000 to $35,000 in repairs, improvements, and upgrades into their mortgage.

• VA Renovation

A VA renovation loan is a government-backed loan program that assists veterans, active military personnel, and their surviving spouses in financing home repair projects. The loan can be used to purchase a home that does not satisfy basic habitability requirements and to finance up to $50,000 in renovation costs. VA rehabilitation loans, like standard VA loans, let borrowers acquire a property with no money down and low-interest rates. A one-time funding fee, as well as closing costs, might be rolled into the loan. 

Apply for a Home Renovation Loan

Capital Home Mortgage is a mortgage loan servicer and a direct lender. Any of our home improvement loans are available to Colorado residents. Our highly qualified mortgage professionals will collaborate with you to develop the best lending package that matches your needs while staying within your financial limits.

To begin your home improvement project, please contact us at (303) 266-1177.