Houston Home Renovation Loan

Need a loan to fix up your home? A home renovation loan is a type of loan product specifically intended to finance the repair or renovation of an existing property. 

At Capital Home Mortgage Houston, we offer a variety of home renovation loans in Houston, including  FHA 203(k) loans, Freddie Mac CHOICERenovation Loans, and Fannie Mae HomeStyle Loans.

Here’s what you need to know about obtaining a Houston home renovation loan.

FHA 203(k) Loans

The FHA 203(k) loan program encourages low- to moderate-income families to buy and renovate old homes. In Texas, you can apply for an FHA 203(k) and purchase a home at a lower price. You can also use this loan for home improvements, remodeling for particular purposes, or adding more rooms. 

There are two types of FHA 203(k) loans:

• Standard 203(k)

The standard 203(k) loan is for extensive renovation work. It involves significant repairs and changes in the structure of the house. There is no cap for the maximum loan amount, but the property value must be within FHA limits, with repairs and renovations that exceed $35,000. 

You can use the loan proceeds for plumbing and flooring repairs, installation of heat and air-conditioning systems, and renovation projects for seniors and disabled persons. However, luxurious renovations are not included in the allowed renovation projects.

• Limited 203(k)

Homebuyers and homeowners can finance the cost of both the purchase (or refinancing) of a home and its renovation with a single mortgage, or they can fund the renovation of their current home using Section 203(k) insurance.

If your home doesn’t require much renovation, you can choose the limited 203(k) loan for minimal repairs. Getting a limited 203(k) is more accessible, but the loan cap is only up to $35,000, and the renovation cost must be at least $5,000.

We recommend talking to your contractor first to determine the scope of the renovation work. Our experts at Capital Home Mortgage will then help you assess if it’s qualified for a limited 203(k) or the standard 203(k).

CHOICERenovation Loan

The Freddie Mac CHOICERenovation loan is a counterpart of an FHA 203(k) for Freddie Mac borrowers. First-time homebuyers can get a CHOICERenovation loan to buy a home and pay for its improvements. It’s a consolidated mortgage loan since the proceeds can be used to pay the seller with the excess amount for repairs.

HomeStyle Loan

The Fannie Mae HomeStyle Loan program can cover renovation costs of primary residences, one-unit second homes, and single-unit investment dwellings. However, renovations for manufactured homes are only up to 50% of the “as-completed” appraised value of the property. 

Down payment for this loan program can be as low as 3%, but it can reach up to 25% for a three- or four-unit principal residence.

Apply For A Renovation Loan In Houston

Our mortgage experts will help you explore the right loan for your needs. Capital Home Mortgage is a direct lender, meaning we make all the decisions in the application process. This allows us to offer a streamlined process, flexible underwriting, and competitive interest rates. 

Talk to our mortgage experts today about your home renovation loan in Houston. Call (800) 850-4255 to get started.