Renovation Home Loans In Austin

Many new homes are being built around the country, and most sell quickly. Knowing homebuyers can still buy a fixer-upper is reassuring, given how “hot” the property market has recently been.

Home buyers and sellers might benefit from home improvement financing in Austin, Texas. They give homebuyers the option and freedom to buy a house, then make changes to it to suit their preferences. They also let the seller sell the home as-is, sparing them the trouble of performing pointless improvements and repairs before selling.

Types of Home Renovation Loan Programs

• FHA 203k Home Loans

The FHA 203(k) home loan program enables customers considering buying a fixer-upper that needs numerous repairs and intensive rehabilitation work to combine the cost of the house and these projects into one mortgage. There are two types of 203k loans, (a) standard and (b) limited.

             – Standard 203(k) Loan

You must choose this loan if your home modifications necessitate engineering or architectural drawings and inspections. Additionally, the repairs’ estimated amount should be greater than $35,000. This home loan program essentially pays for the complete demolition and rebuilding of your home. You must keep the original house’s foundation as the requirement for this type of loan.

             – Limited 203(k) Loan

The streamlined or limited 203(k) loan is intended to finance renovations worth no more than $35,000. It’s also crucial to remember that only modifications not requiring engineering or architectural drawings are covered under this mortgage. This loan pays for minor repairs, roof and gutter replacement, interior or exterior painting, and patio installation.

• FannieMae Homestyle

A government-backed mortgage called the Fannie Mae HomeStyle Renovation loan offers minor home renovation and maintenance. The loan may take the form of a mortgage to acquire a property or refinance an existing mortgage with additional funds for improvements.

The amount of a Fannie Mae HomeStyle loan is limited to 75% of the property’s appraised value “as-completed,” rather than the property’s current pre-renovation value. It is only offered through Fannie Mae-approved lenders. This benefits homeowners who don’t have much home equity to draw upon for loans.

Borrowers may use this loan to purchase an investment property, second house, or principal residence. It has fixed or adjustable interest rates and 15- or 30-year periods. The cash payment for renovations is retained in escrow and must be utilized only for the renovation.

Additionally, any renovation must permanently be affixed to the property and increase its worth. The lender must keep track of the job, have all the supporting documentation, and finish the improvements within a year of receiving the mortgage.

• FreddieMac ChoiceRenovation

With the help of CHOICERenovation, lenders can offer Freddie Mac loans where borrowers use the loan proceeds to pay for improvements. It fills a void for lenders looking for a credible, traditional product to support renovation finance and give borrowers affordable options.

Borrowers can purchase fixer-uppers through CHOICERenovation, or current homeowners can rehabilitate their properties. This is especially helpful for properties damaged by natural catastrophes and the aging housing market.

Up to a maximum LTV of 95%, borrowers may utilize the mortgage funds to pay for renovations and enhancements. Additionally, the CHOICERenovation program permits specially accredited seller-servicers to provide mortgages before the renovation modifications are finished.

Apply for a Home Renovation Loan in Austin

Capital Home Mortgage will assist you with your Austin home renovation loan application. From conventional and government-backed loans to the rehabilitation mentioned above, we originate many mortgage choices.

As a direct mortgage lender in Texas, we have complete control over the entire process, from application to closing. We’re committed to giving our clients a more straightforward and enjoyable experience with home loans!

For more details on our Austin Renovation Home Loans, contact one of our renovation mortgage specialists at (800) 960-4565.