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The Power of Good Advice

  • Writer's pictureBarry Jilin

Fun Facts on Renovation & 203K Loans

HomeStyle Renovation Mortgage

Continue With More HomeStyle…

The HomeStyle is a Fannie Mae (FNMA) loan that essentially allows an investor to purchase a property and include the renovation costs into the mortgage. It’s quite similar to a hard money loan, but the significant difference is that the loan is a permanent loan (15 or 30-year fixed). It’s also traditionally a LOT cheaper. Since the loan is FNMA backed, it’s going to conform more to the market interest rates and fees for a conventional mortgage

Who? Fannie Mae is America’s largest secondary lender. Many of their tradition guidelines that apply to conventional loans also apply to their HomeStyle product. One thing to keep in mind is that not all FNMA qualified lenders are qualified to also sell this product, so you must ask​.

What? The HomeStyle loan is designed for investors and owner-occupant buyers as an alternative to the FHA 203(k) loan, as well as for second home buyers.

When? Now! Remember, the HomeStyle mortgage process takes 45 and sometimes up to 60 days to close. Plan accordingly with your contracts.

Where? HomeStyle can be used on single family residences for investments, and 1-4 unit properties for owner-occupied homes.

Why? To preserve CASH!

And? At One Republic Mortgage, our staff is very familiar and knowledgeable in assisting with this type of financing. Experience is key.

FHA 203K

203K-ey Points…

An FHA 203k loan allows the client to borrow money, using only one loan, for both home improvement and a home purchase. These loans can also be used just for home improvements, but there might be better options available. 203k loans are backed by HUD, which means lenders take less risk when offering this product. As a result, it’s easier to get approved, especially with lower rates​.

Who? Because the Federal Housing Authority (FHA) is involved, lenders are willing to move forward with a property they otherwise wouldn’t touch​.

What? Borrow enough to make the purchase plus enough for necessary improvements.

When? A person can borrow enough to finance 110 percent of the home’s projected value after improvement. Appraisers will review the plans and take the future value of the home into account.

Where? FHA 203k must be for owner occupied 1-4 unit properties only (condo, townhome, singe home, and 1-4 unit ok).

Why? Fund repairs and purchase. Must borrow at least $5,000, and there are maximum limits set by the FHA that vary by location. With the 203k loan, like other FHA loans, down-payment can be as little as 3.5 percent up front.

And? Team at One Republic Mortgage is eager and willing to advise, from your first showing to the closing table. Do not feel intimidated, feel confident and in good hands.


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