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Is there such a thing as a packaged Home loan / Home Improvement loan?

I wish to buy an older home, and then have it professionally renovated.  Is there such a mortgage product that will loan me the money to buy the home, and the money to do the renovations?  An all-in-one, package deal type of thing?
  • August 13 - Houston
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Answers (7)

Yes there most definitely are.  We offer 2 different types of renovation loans, we provide you with the best one to suit your needs.  To reflect on what some other folks have said, yes the loan does take a bit longer, we generally suggest 45-60 days processing time to ensure a smooth transaction.  These loan types are certainly unique, but Bruce hit the nail on the head.  Its important to work with a lender who is fluent in renovation products.  I have been working with these loans for 17 years, and AnnieMac additionally has a division of our company dedicated solely to renovation lending.  More info here:  http://www.203ktexas.com/
  • August 28
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Most of the responses here are great.  Wells Fargo and my team offer a All-in-one renovation loan to do most fix-ups, renovations and even additions. The loan closes once all fixes are complete so the average is about 45 days but could be longer depending upon the work that needs to be done.  Feel free to contact me to get a quote.

  • August 15
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There is a program that allows for an escrow holdback.  This is a conventional loan, so you can pick your own general contractor.  The appraised value is determined subject to completion.  But the catch is that you can only holdback 10% of the appraised value, so not sure if this would be enough if you're doing a complete renovation.

A second conventional program is the rehabilitation loan.  Typically, this is for homes that have such a significant amount of deferred maintenance that the home is unsafe or inhabitable.  In this situation, you can add back 50% of the appraised value.

Others have already commented on the 203(k) and the Homepath Renovation programs.

  • August 15
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Yes...it is called 203k.  You want to find a loan officer who knows these in and out and considers it a specialty.  They are tricky.  Lots of people will tell you they know how to do them, but you want to find someone who does them and does them all the time.   Ask around 4-5-10 loan officers who they refer to for 203k.  Chances are 2-3-4 of them will all name the same person.  That's who you want to use.
  • August 14
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Yes, as explained below there are two types of mortgage which include the Fannie Mae Home-Path program, and the FHA 203K mortgage which provides you with the funds to update your home, and the cost are included in your mortgage amount. In depends on what you qualify for, that determines how much money in renovation can be used. So for example if your income only qualifies you for 400K, and you buy a home for 350K that need 75K in repairs, then the max you would get is 400K, and the remainder 25K would be out of pocket. In order to avoid any out of pocket cost, you would have to either find something a little cheaper, or maybe you lower the budget for the amount needed in repairs, and do the major items first and when you refinance do the remainder through the equity of your home, as the values tend to rise when doing extensive repairs. In my experience, these types of loans take roughly three weeks to close if done properly.
  Hope this helps, and please feel free to reach out to me with any questions or advice.
  • August 13
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Hamp Yonce is correct about the two types of loan products you are referring to. Time is usually the biggest hurdle in the process. It takes time to find contractors, schedule the time to meet, discuss your ideas, get the bid, accept the bid, get a HUD adviser to approve and move forward. It's hard to guarantee these loans closing in less than 60 days, but they happen everyday and can be done. 
  • August 13
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There are two, at least.  The FannieMae HomeStyle Renovation loan and the FHA 203K Renovation loan. Both allow a consumer to buy a house and build in monies to improve the home. They are about 2.5 times as complicated as a regular purchase loan. They require a level of patience, and diligence, that is often hard to produce. They also require a contractor that understands the product.
  • August 13
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