Do You Need A Home Loan To Renovate / Rebuild After Hurricane Harvey?
A renovation loan is a loan where you are able to refinance your home that needs to be remodeled or repaired. The loan allows you to borrow money for the repairs as part of your first mortgage on the home. Therefore, you are able to begin construction on the new house immediately after closing on a loan and you do not need to take a second mortgage or come up with the additional capital to improve the house.
Top 10 Things We Can Help You Consider
- A renovation loan can be approved with your home in its current distressed condition.
- Renovation Loans are 15 and 30 year fixed rate mortgages that can roll all of your renovation and repair costs into a new loan.
- You have an ability to borrow more money. A renovation loan will allow you to borrow based on the expected value of the upgraded home.
- In some cases you can borrow up to 110% of your homes after repaired value.
- You are able to select your own contractors as long as they are licensed in the state of Texas to perform the work that’s needed.
- Out of pocket costs can be kept to $500 or less in most cases.
- You may be able to include temporary living costs into your new loan while your work is being completed.
- Your application can generally be approved in 1-2 business days.
- These loans are insured by Fannie Mae and or Freddie Mac.
- You can set up your monthly escrows into the new loan.
Below are a list of repairs and remodels that are allowed.
* Please note it is not a full comprehensive list.
- Accessibility improvements for persons with disabilities
- Lead based paint stabilization or abatement of lead-based paint hazards (HUD properties only)
- Structural alterations and additions
- Garage (attached/detached)
- Remodel kitchen or bathroom
- Install appliances
- Changes to eliminate deterioration and reduce maintenance
- Repair swimming pool (up to $1,500)
- Modernize plumbing/heating/air conditioning/electrical systems
- Install or repair roofing/gutters/downspout
- Install flooring/tile/carpet
- Energy conservation improvementsMajor landscaping/decks/fencing
- Improvements for accessibility • Interior and exterior painting
- Improvements that are a permanent part of the real estateRepair/Replacement of roofs, gutters, and downspouts
- Repair/Replacement/Upgrade of existing HVAC systems
- Repair/Replacement/Upgrade of plumbing and electrical systems
- Repair/Replacement of flooring
- Minor remodeling such as kitchens which does not involve structural repairs
- Painting, both exterior and interior
- Weatherization, including storm windows and doors, insulation, weather stripping, etc.
- Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/ dryers, dishwashers and microwave ovens after the first $5,000.
- Repair/Replace/Add exterior decks, patios, porches
- Basement finishing and remodeling, which does not involve structural repairs
- Basement waterproofing
- Window and door replacements and exterior wall residing
- Septic system and/or well repair or replacement RENOVATION LENDING | 10 Improvements ineligible
- Major rehabilitation or major remodeling such as the relocation of a load bearing wall
- New construction (including room additions)
- Repair of structural damage
- Repairs requiring detailed drawings or architectural exhibits
- Landscaping or similar site amenity improvements
- Any repair or improvement requiring a work schedule longer than six months
- Rehabilitation activities that require more than two payments per specialized contractor Mortgagors may not use the Streamline (K) program to finance any required repairs arising from the appraisal that do not appear on the list of Streamlined (K) eligible work items or that would:
- Necessitate a “consultant” to develop a “Specification of repairs/Work write up”
- Require plans or architectural exhibits
- Require a plan reviewer
- Require more than six months to complete
- Result in work not starting within 30 days after loan closing
- Cause the mortgagor to be displaced from the property for more than 30 days during the time the rehabilitation work is being conducted (FHA anticipates that in a typical case the mortgagor would be able to occupy the property after mortgage loan closing)