Renovation Loans are Available!

Receive a quote on a renovation loan today.

READY TO LEARN MORE ABOUT
THE FHA LOAN?

Turn a Less Than Perfect Home into Your

Dream Home with a Renovation Loan!

About Renovation Home Loans

A renovation loan is a loan backed by the federal government and given to buyers who want to renovate a home. A renovation loan allows the borrower to finance the home, plus provides financing to do the necessary renovations to the home.
We’re here to make the renovation home loan process easier, with tools and knowledge that will help guide you along the way, starting with our Renovation Loan Qualifier.
We’ll help you clearly see differences between loan programs, allowing you to choose the right one for you whether you’re a first-time home buyer or a repeat buyer.

What is a construction loan?

Here’s how our home loan process works:
  • Complete our simple Renovation Loan Qualifier
  • Receive options based on your unique criteria and scenario
  • Compare mortgage interest rates and terms
  • Choose the offer that best fits your needs

BUY A FIXER-UPPER

Rather than buying a fixer-upper with the intention of updating it in the future using savings or high-interest credit cards, customize your home the way you want it now by financing the cost of renovations right into the mortgage loan.
Everyone has their own individual tastes, and paying out of pocket for renovations on elective OR maintenance items can be costly. Why not add your own personal touch or make repairs by using a renovation loan for the purchase?
As a buyer, you can do all of the following and MORE using renovation financing:
  • Replacing the roof
  • Updating the kitchen
  • Replacing HVAC or furnace
  • Replacing appliances
  • Replacing toilets and plumbing fixtures
  • Replacing flooring
  • Repainting, inside and outside
  • Adding square footage
Pick and choose what you want. There are endless options to create your dream home!

Comparing Renovation Loan Options

LIMITED 203K

EXAMPLES OF ELIGIBLE REPAIRS

DOWN PAYMENT AND LOAN-TO-VALUE (LTV)*

ELIGIBLE PROPERTY TYPES

ELIGIBLE OCCUPANCY TYPES

NUMBER OF DRAWS

ADVANCES

MATERIALS DRAWS

PROOF OF PERMITS

HOLDBACKS

LIMITED 203K

  • Updating a kitchen or bathroom
  • Replacing fl ooring
  • Replacing appliances
  • Repairing the roof
  • Upgrading HVAC system and other energy effi cient upgrades

3.5% (96.5% LTV)

  • 1- to 4-unit properties
  • Condominiums (internal repairs only)
  • Townhomes (internal repairs only)

Primary

1 initial and 1 final draw per contractor

Up to 50% of repair cost can be distributed at closing when requested in writing prior to close.

Not allowed

Required within 30 days of loan closing

No holdbacks on draws

STANDARD 203K

  • Building an addition
  • Building a new garage
  • Tearing down and rebuilding
  • Upgrading mechanical systems
  • Installing a well and/or septic system
  • Updating the interior

3.5% (96.5% LTV)

3.5% (96.5% LTV)

Primary

Up to 5 draws

Not allowed

Not allowed

Required on or before first draw

10% holdback on all draws, except final draw

HOMESTYLE

  • Renovating kitchens and bathrooms
  • Updating landscaping and site amenities
  • Adding square footage to the home
  • Putting in new fl ooring
  • Repairing pool and/or spa

1-Unit Primary: 3% (97% LTV) [At least one borrower must be a fi rst-time homebuyer]

1-Unit Primary: 5% (95% LTV)

1-Unit Second Home: 10% (90% LTV)

1-Unit Investment: 15% (85% LTV)

Mortgage Insurance (MI) is required for any LTV that exceeds 80%.

  • 1- to 4-unit properties
  • Condominiums (internal repairs only)
  • Townhomes (internal repairs only)

Primary, Secondary, Investment

Up to 5 draws

Not allowed

Case by case, up to 50% of total materials budget, based on need

Required on or before first draw

10% holdback paid out with final draw

CONTINGENCY FUNDS AND CHANGES TO SCOPE OF WORK

COMPLETION DATE

Contingency funds are intended for unforeseen repairs. Once all items on the bid are completed, contingency funds may be used for additional repairs or applied as a principal reduction.

Work must begin within 30 days of loan closing, may not cease for any 30 consecutive day period and must be completed within six
months of loan closing.

Fairway is not affiliated with any government agencies. These materials are not from HUD or FHA and were not approved by HUD or a government agency.

Why a Renovation Loan?

The main benefit of these loans is that they give you the ability to buy a home in need of repairs that you might not otherwise have been able to afford to buy. Plus, the down payment requirements are minimal, and often you may be able to receive a favorable interest rate.

Fixed-Rate
mortgage

Minimal Down
Payments

Terms of 15-, 20-, and
30-Years Available for
the Fixed-Rate Products

Get Your Renovation Loan Quote Now!

Construction loans are short-term loans that cover the cost of building a new home. These loans are usually shorter in duration and are paid directly to the contractor in installments, or “draws,” as building milestones are met. An inspection is typically required before each payment is released to the contractor. To learn more about how construction loans work, connect with one of our construction-certified mortgage loan officer.
Just as with a traditional mortgage, you must meet certain requirements related to credit score, debt-to-income ratio and more to qualify for a construction loan. Your lender will review your income, assets, liabilities and credit history, as well as order an appraisal.

You’ll also be asked to provide additional documentation related to the construction project, like your contract with the builder, construction plans and specifications. You can expect a slightly longer application process due to the additional information that needs to be reviewed.
If you meet the established guidelines for credit score, down payment, income and debt-to-income ratio (the amount of recurring debt you have relative to your monthly income), you may qualify for a construction loan. You’ll also need an appraisal of the property, a detailed plan and purchase contract for your construction project, and you must work with an established builder.
Do your research to find a builder that not only meet your needs, but also any requirements set by your lender. Your homebuilder should be experienced, licensed and insured. To find a builder in your area, check out the National Association of Home Builders (NAHB) online directory. You could also ask for recommendations from friends, family and real estate agents who specialize in new home construction. Or search online for highly rated builders, builder reviews and credentials.
You should feel comfortable asking a homebuilder about anything you feel is important. To start, choose two to three builders from your list of recommendations, and arrange to meet with them in person. A face-to-face meeting will give you a better feel for the builder and their experience.

Consider the following questions when interviewing builders for your project:
  • Does the builder have proven experience building the style and quality of home you want?
  • Do they meet state licensure and insurance requirements?
  • What is their reputation in the community?
  • Do they have a good rating with the Better Business Bureau?
  • Can they provide references from past clients, suppliers and local banks?
  • Is the builder a recipient of any industry awards?
  • Are they involved in any professional associations?
A borrower’s jumbo loan limit depends on their specific situation — including their credit score, DTI, cash reserves and overall financial history. Each of these elements plays an essential role in helping lenders determine how much of a loan each borrower can manage. As a borrower’s cash reserves and credit score increase, so will their jumbo loan threshold.