Did you know there are California home loans that will help you not just to buy a home, but also pay for renovations? If you’re considering buying a house that needs some work, sometimes called a “fixer-upper,” or a “handy-mans special”, or a property that needs “TLC” aka “Tender Loving Care”, you do have options to pay for the work that it will need.
What type of home renovation loans are there?
The best-known type of home renovation loan is the FHA 203(k) loan. This loan comes in two versions: limited and standard. The limited FHA 203(k) loan will pay for up to $35,000 in renovations, as long as they’re not considered to be luxuries by the Federal Housing Administration (FHA). A new bathroom isn’t a luxury, but a new swimming pool would be, according to FHA guidelines.
The standard FHA 203(k) loan will pay for renovations over $35,000. In order to qualify for this loan, you will need to work with a HUD-certified consultant who will get bids and oversee inspections of the work. Both of the FHA 203(k) loans will pay for renovations on your primary residence. They aren’t available for second homes or investment properties.
Other home renovation loans include FannieMae‘s HomeStyle loan, and Freddie Mac’s CHOICE Renovation loan. These loans require higher credit scores than an FHA 203(k) loan. You could potentially qualify for an FHA 203(k) loan with a credit score as low as 500 to 520, but you will need to make a down payment of at least 10%.
Don’t let a “fixer-upper” stop you from buying the home you want
If you find a home that you can afford in the neighborhood you want, but it needs upgrading or repairs, don’t pass it by until you’ve considered a home renovation loan like an FHA 203(k) loan. There are many California home mortgages which can pay for the purchase and renovations that can help you to move into the neighborhood you want to live in, and have a modernized live-able and enjoyable home with the upgrades/renovations and repairs, you want and need. These loans allow you to finance 100% of the renovation rehab costs. All those costs are rolled into the loan. You just pay your normal down payment on the purchase, the rest of the costs including renovation, permits, and holding costs during the renovation period are often times covered by the loan. So you start making payments when your home is move in ready. Contact Us here at California Platinum Loans to see how we can make your dreams of buying a fixer upper with a low down payment a reality today!