Home Renovation Loans Auburn Washington

A home renovation loan is a type of loan that gives homeowners the financial resources they require to make repairs and improvements to their homes. It’s often bundled with a mortgage loan. Borrowers may use this loan to purchase a home or refinance an existing mortgage. Property improvement loans are the only type that allows homeowners to receive credit for an increase in the value of their homes. This allows the borrower to obtain the best interest rate.

The value of the home after it has been renovated is the most important consideration for home improvement loans, which are calculated based on an estimate of the home’s value after it has been renovated. The borrower may be required to provide evidence that the money was spent on the house or paid to a contractor, but this will depend on the type of loan received.

Types Of Home Renovation Loans

• FHA 203(k) 

This government-backed loan can be utilized to finance the acquisition of property and refurbish an existing one. There are two different kinds of FHA 203(k) loans: limited 203(k) loans, which have a maximum loan amount of $35,000, and standard 203(k) loans, which are for more extensive home improvement or building endeavors. Both of these loan types require a minimum credit score of 580.

• Fannie Mae HomeStyle

A Fannie Mae HomeStyle loan also called a HomeStyle Renovation loan, is a kind of mortgage loan that enables homebuyers to finance their home’s purchase or refinance as well as the cost of renovations or repairs with only one loan. Fannie Mae, a government-sponsored company that aspires to increase house ownership opportunities for American families, provides this loan.

The HomeStyle loan can be used for various home improvement projects, from modest updates like energy-efficient appliances to significant projects like kitchen or bathroom remodeling, room addition, or landscaping. Additionally, the loan can be utilized to restore an older home to its former splendor.

Keep in mind that these loans are subject to specific credit and income requirements, as well as a down payment of at least 5% of the purchase price or the as-completed value of the property. All remodeling work must also be performed by a certified contractor and in compliance with all applicable codes.

• Freddie Mac ChoiceRenovation

CHOICERenovation enables lenders to offer loans to Freddie Mac, in which the borrower pays for improvements with loan proceeds. This solution fills a market void for lenders seeking a robust, conventional offering to support renovation financing and give borrowers cost-effective choices.

Both CHOICERenovation and HomeStyle Renovation loans are mortgage choices for financing home improvements, although they differ significantly. The HomeStyle mortgage does not allow you to fund changes to your home’s resilience (think of it as “disaster proofing”); however, the CHOICERenovation mortgage does.

The most crucial distinction is that the total cost of the renovations that can be financed cannot exceed 10% of the value of the home after it has been finished (or 15% in rural areas that have a high needs rating). And any Freddie Mac Seller is eligible to supply recourse-free CHOICEReno eXPress mortgages before the renovations finish, even if they are still ongoing.

Apply For A Washington Home Renovation Loan

Capital Home Mortgage is both a direct lender and a servicer of mortgage loans. Residents in Washington are eligible for our full selection of loans for home improvements. Our highly experienced mortgage team will work with you to find the finest lending package that meets your requirements and is within your budgetary constraints.

To get your home improvement projects underway, please contact us at (253) 528-4417.