Are you in the market for a fixer-upper? Perhaps have some ideas on how to make your potential dream home a little dreamier? From major restorations to simple upgrades, a Texas home renovation loan may be the financing option you seek. Let’s look at this unique mortgage program.
One Loan for Two Goals
Why rely on different solutions for home financing and renovation costs when you can handle them all in one? The answer lies at the heart of Fannie Mae’s HomeStyle® program; one mortgage application and one set of closing costs cover everything. No catch. It’s a conventional mortgage at a competitive rate that eliminates the need to take out a separate loan, such as a home equity line of credit (HELOC), for home improvements.
What types of improvements can you do?
That’s a long list. In principle, almost anything as long as the improvement adds value and will be permanently attached to the property. Even swimming pools and hot tubs? Most likely. From interior remodeling such as new flooring and bedroom additions to exterior work including outdoor kitchens, landscaping, and hardscaping, most of the common upgrades are covered by this loan.
How do these Texas home renovation loans work?
Working with a Fannie Mae-approved lender such as the Decker Group, you’ll probably want to begin with pre-approval to know the amount you’ll be able to borrow. From there, you’ll search for a house that has a combined purchase price and renovation costs for the pre-approved loan amount or less. For example, if you’re pre-approved for a $300,000 mortgage, you might look for a home with a purchase price of $225,000 and then budget $75,000 for renovations.
What kinds of properties are eligible?
Lots. This includes single-family homes, condos, townhomes, some second homes and investment properties, and two- to four-unit properties. Even homes that need extensive repairs may qualify; the program allows for up to six months worth of principal, taxes, insurance, and interest in the upgrade financing so that the buyer can live elsewhere while the work is being done.
What else do I need to know?
This loan is for fixed-rate mortgages, borrowers with credit scores as low as 620 may qualify, and according to Fannie Mae’s guidelines, the renovations must be completed within 15 months of the closing date.
Connect with us online or call us at (972) 591-3097 to talk about handling both your home’s purchase and its upgrades with this innovative mortgage program.