If you're looking to buy a fixer-upper or renovate your current home, a rehab loan might be the perfect solution. Rehab loans, also known as renovation loans, provide the funds needed to purchase and repair a property in one convenient package.
A rehab loan is a type of mortgage that allows homebuyers to finance both the purchase price of a property and the cost of renovations through a single loan. These loans are ideal for those looking to buy homes in need of significant repairs or for current homeowners wanting to make major improvements.
FHA 203(k) Loan: This is one of the most popular rehab loans, backed by the Federal Housing Administration (FHA). The FHA 203(k) loan allows borrowers to finance up to 110% of the home's after-repair value. There are two types of FHA 203(k) loans: Standard 203(k) for major renovations costing over $35,000; and Limited 203(k) for smaller projects under $35,000.
Fannie Mae HomeStyle Renovation Loan: This conventional loan allows borrowers to finance renovations up to 75% of the home’s as-completed appraised value. It is available for both primary residences and investment properties.
Freddie Mac CHOICERenovation Loan: Similar to the Fannie Mae HomeStyle loan, this option also allows for renovations up to 75% of the home’s value. It can be used for both owner-occupied and investment properties.
Getting pre-approved for a rehab home loan is quick and easy with our online Loan Application. After completing the application, you will receive instructions on how to upload your documents. For a list of documents you will need to upload, see our Pre-approval Document Checklist.
Understanding the different types of rehab loans and their specific requirements can help you choose the right option for your next home renovation project. By comparing different loan options and understanding the application process, you can make informed decisions and navigate the path to a successfully financed renovation. It's essential to consult with a knowledgeable lender to discuss your specific situation and determine the best rehab loan option for your needs. At Alpine Mortgage, our experienced loan specialists can guide you through the process and help you unlock your home's potential. We offer home rehab loans in California, Connecticut, Florida, New Jersey, New York, Pennsylvania and Texas.
Contact us today at (800) 876-5626 to learn more about our rehab loan programs or click here to have one of our rehab loan specialists contact you.
If you would like to apply for a rehab loan, you can apply online now.
For further information and assistance, check the following resources:
Most rehab loans require that the work be completed by a licensed and insured contractor, although the limited FHA 203K may allow for DIY in some cases.
Yes, most renovation loans have specific guidelines on what other home improvement projects can be financed. Generally, improvements must be permanent and add value to the home.
Typically, renovations must be completed within 6 to 12 months after the loan closing.
This depends on the loan type. For example, FHA 203K loans are generally more restrictive and prioritize essential repairs and upgrades, while HomeStyle Renovation loans offer more flexibility for luxury improvements.
Most rehab loans include a contingency reserve that can be used in the event that the renovation goes over budget.
If you are looking to do build a house from ground up, see our Construction Loans.
