Renovation Home Loans In Spokane

A home renovation loan is a financial instrument that gives householders the funds necessary to complete home improvement projects. This may involve anything from modest repairs and updates to extensive renovations or remodeling.

The ‘after-renovation value’ of the property is a crucial aspect of a home renovation loan. This refers to the anticipated value of the property after completing all renovations. Many renovation loans are based on this after-repair value (ARV), and lenders use this estimated value to determine how much-qualified applicants can borrow.

Types of Spokane Home Renovation Loans 

There are numerous home improvement loans, and the one that is best for you will depend on factors such as your creditworthiness, the size of your renovation project, and whether you already own the property or intend to purchase it.

• Fannie Mae HomeStyle Renovation Mortgage

This is a combined purchase and home improvement financing. It enables you to purchase a fixer-upper and finance the repairs and remodeling with a single loan. The property’s value determines the loan amount after it has been improved or after-repair value.

• Freddie Mac ChoiceRenovation Mortgage

The ChoiceRenovation mortgage is a loan product provided by Freddie Mac that enables borrowers to purchase or refinance a property and include renovation costs in the same loan. This product was created to fill a market void for lenders seeking a robust conventional loan product that supports renovation financing and offers cost-effective solutions for borrowers.

In addition to the CHOICERenovation mortgage, Freddie Mac offers the CHOICEReno eXPress mortgage, a streamlined renovation mortgage designed for borrowers seeking to finance relatively modest renovations. The key difference is that lenders can sell CHOICEReno eXPress mortgages to Freddie Mac before the renovations are complete.

• FHA 203(k) Loans

An FHA 203(k) loan, or a mortgage rehab or renovation loan, can be used to support purchasing and renovating a home with a single mortgage. This is especially important for home buyers considering acquiring a fixer-upper that will require extensive repairs and restoration.

FHA 203(k) loans are classified into two types: standard (or regular) 203(k) loans and limited (or streamline) 203(k) loans.

• Standard 203(k) Loans

These loans are for homes that require structural improvements, such as a new roof or an addition. It is also for properties that need repairs exceeding $35,000. These funds may also be used for enhancements required to comply with building codes. Standard 203(k) loans necessitate a HUD consultant’s oversight of the renovation process. One of the critical features of a standard 203(k) loan is that it covers a wide variety of repairs and renovations, giving homeowners and purchasers a great deal of freedom in deciding what to do with their property.

• Limited 203(k) Loans

These loans, also called Streamline 203(k) loans, are for properties requiring non-structural repairs and renovations costing less than $35,000. These repairs may include modest kitchen or bathroom renovations, painting, HVAC, plumbing, electrical fixes, and roof and flooring maintenance. These loans do not require a HUD consultant, which facilitates the process. A vital characteristic of the limited 203(k) loan is that it is intended to finance relatively minor repairs and improvements, allowing homeowners and buyers to make necessary updates to the property without undertaking a complex renovation.

Both types of loans encourage homeownership among lower-income households, enabling them to enhance and modernize older primary residences. The loans allow homebuyers to borrow sufficient funds to cover the home’s purchase price and any necessary restorations, including labor and materials. The amount of money you can borrow depends on your credit score and income. This aids those with insufficient funds upfront to cover all costs associated with purchasing and renovating a property.

• USDA Section 504 Home Repair Program

The Single Family Housing Repair Loan and Grant Program is administered by the United States Department of Agriculture (USDA) in Washington. This program, also known as the Section 504 Home Repair program, provides loans to very low-income homeowners to repair, remodel, or modernize their homes. Grants are also offered to older, low-income homeowners to help them remove health and safety issues.

• Home Equity Loans & HELOCs

These loans allow you to borrow against your home’s equity to finance home improvements. They may have lower interest rates than unsecured personal loans, but your home may be at risk if you default.

Apply for a Spokane Home Renovation Loan

Capital Home Mortgage is an excellent option for Spokane house buyers seeking home improvement loans for several reasons. First, our wide range of loan choices, including home equity loans, makes it easy to pick one that meets your needs, budget, and aspirations. Capital Home Mortgage simplifies borrowing, allowing homeowners to start renovations sooner. This benefit is beneficial in today’s fast-paced real estate market when a shortage of move-in ready homes has pushed many purchasers to explore fixer-uppers. Capital Home Mortgage’s services can help these customers turn outdated or in-need-of-repair properties into dream homes by financing both a home purchase and improvements. 

Our knowledgeable and seasoned team ensures a streamlined, user-friendly application and approval process, providing peace of mind throughout the home renovation process—call (253) 528-4441 to discuss your home improvement requirements with our Renovation Loan Specialists.