If there were ever a time to flip a home, it’s now. Though much of the past year has been difficult, one of the silver linings of a pandemic has been extra free-time to put creative pursuits to good use.
For some, that might involve the art of fixing up a home. If you’re fortunate to have found the perfect house, in the right location, at a price that aligns with your budget, it’d be a shame that several repairs and projects should get in the way.
Luckily, there are several ways to finance a fixer-upper—loans created specifically for your needs, whether you’re a first-time buyer or a real estate tycoon, or somewhere in between.
Keep reading to discover three common loans for house renovations, according to the Mortgage Market Guide.
Known as the Fannie Mae “HomeStyle Renovation Loan,” it’s one of the most cost-effective options; it works by combining both the renovation costs and the costs of the home, all into one mortgage. It also allows financing for up to 75% of the property’s as-is or appraised value after all of the upgrades are finished.
As an extra bonus, this loan option is available to primary homes, secondary homes, and rental properties.
Another option is the FHA 203(k) loan, which is known for being borrower-flexible with certain property guidelines. For example, you can get this loan with lower credit scores than your average conventional loan. However, this loan has to be used for a primary residence.
The “CHOICERenovation” mortgage by Freddie Mac allows financing for up to 75% of the property’s as-is value. It’s a little more specific in its funding details. For example, renovations are meant to be used on projects or repairs for property damage centered on natural disasters—either repairing issues from them or preventing future damage. The money can be used for retaining walls, preventative foundations, or barriers.