Renovation Loans

The HomeStyle Renovation mortgage enables a borrower to purchase a property or reﬁnance an existing loan and include funds in the loan amount to cover the costs of repairs, remodeling, renovations, or energy improvements to the property.

Renovation loans cover both the property and the required renovation costs, requiring that lenders base the loan amount on the after-repair value (ARV). The ARV of the property determines how much you can borrow using a renovation loan.

First step as the borrower, will be choosing a general contractor and they will put together a work bid, detailing all of the labor and material costs associated with the project. That work bid will then be given to the appraiser at the time of appraisal inspection, and the appraiser is required to assess the value of the home with all of the items accounted for on the work bid, to help give it the final, completed after-repair value.

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HomeStyle Renovation Loan

There are no required improvements or restrictions on the types of renovations allowed, nor is there a minimum dollar amount for renovations.
Generally, improvements should be permanently aﬃxed to the real property (either dwelling or land), with the exception of certain appliances installed with kitchen and utility room remodels. The borrower may use HomeStyle Renovation to purchase appliances as part of an overall remodeling project that includes substantial changes or upgrades to the rooms in which the appliances are placed.
HomeStyle Renovation may be used to complete the ﬁnal work on a newly built home when the home is at least 90% complete. The remaining improvements must be related to completing non-structural items the original builder was unable to ﬁnish. Such work may include installation of buyer-selected items such as ﬂooring, cabinets, kitchen appliances, ﬁxtures, and trim.
HomeStyle Renovation may be used to construct various outdoor buildings and structures when allowed by local zoning regulations. These buildings or structures must be in compliance with any applicable building codes for the local area. Examples of acceptable structures include, but are not limited to, accessory units, garages, recreation rooms, and swimming pools.
HomeStyle Renovation may not be used for complete tear-down and reconstruction of the dwelling.
HomeStyle Renovation may also be used to ﬁnance energy-related improvements
At closing, the cash is ready for all labor and materials
Lender communicates and directs all draws made to the general contractor

New Construction Loans

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A One-Time Close New Construction loan is a single closing construction loan. The construction portion is short-term financing that is modified into permanent financing upon completion of the project. A single closing construction mortgage can be closed as a purchase or a refinance.

What Is A Single Closing?

A single closing construction loan is the combination of financing the construction and the permanent mortgage. There is a single closing transaction that occurs prior to construction beginning.
Closing costs/fees that the borrower is responsible for are collected at closing. Funds are accessed through draws and there is an initial draw at closing for proceeds to the contractor to begin the construction project.
Eligible for both Conventional and VA buyers
Conventional Buyers: Interest only payments during build time
VA Buyers: Zero payments during build time
At closing, the cash is ready for all labor and materials
Lender communicates and directs all draws made to the general contractor
May be eligible for Interest Rate Float Down at time of permanent financing

What Is A One-Time Close New Construction Purchase Loan?

The loan purpose is a purchase when the borrower is not the current owner of the lot on which the home will be built. The borrower is using the loan funds to purchase both the lot and to fund the construction of the property. The loan amount includes the sum of the sales price of the lot and the cost to construct the property minus the down payment.

What is A One-Time Close New Construction Refinance Loan?

The loan purpose is a refinance when the borrower already owns the lot in which the home will be built on. The borrower is using the loan funds to pay off any existing liens on the lot and to finance the construction of the home. The loan amount includes the sum of any existing financing from purchase of the lot and the cost to construct the home.