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Frequently Asked Questions

Feel free to reach for more information about these or any other questions!

Question : How long does it take to close a renovation loan?

Closing a renovation loan with most lenders usually takes 45 days. However, when you work with the experts at Ready4Remodel and our lender partners, we guarantee to close in 30 days or less!

Question : What's the minimum down payment for a renovation loan?

The minimum down payment for an FHA renovation loan is 3.5% of the total purchase price and project cost. The minimum down payment for a Conventional renovation loan is 5.0% or 3.0% for first-time home buyers who complete a FTHB class.

Question : How does the financing work?

The best first step is to connect with a renovation lender, to determine your purchasing power (just like any other loan). But what's different, is that we also build the cost of your remodel into the loan. So, once you've identified the home you'd like to customize and are in escrow, an appraiser values your property including your future renos. The loan is based on that value. Upon closing, you begin your remodel!

Question : Are interest rates higher for renovation loans?

Interest rates for renovation loans can vary based on FICO score, amount of down payment and DTI. Compared to standard 30-year loans, renovation loans are usually slightly higher due to the condition of the property and the extra work involved in getting them closed. For more details on specific loan types and rates, it's best to check with lenders directly.

Question: Can i do a renovation loan on my current house?

Yes, you can do a renovation loan on your current house. There are several options that allow you to refinance and remodel your existing home. We even have renovation loans that allow you to keep your low-rate mortgage and do a HELOC based on the after-renovated value.

Question: Do you have a renovation loan for 4 units if I don't live in one of the units?

You cannot use an FHA 203(k) renovation loan for a 1-4 unit property if you don't live in one of the units. However, we have other financing options for investors purchasing 1-4 unit properties. Reach out to a renovation loan specialist to assist you with financing options.

Question: What kind of renovations can I do with a renovation loan?

First, you must address any safety and health hazards like mold remediation, leaky roofs, dry rot, termite damage and foundation issues. Then you can do almost any type of remodeling you want. This includes, room additions, kitchen & bathroom remodels, new windows & doors, plumbing, electrical, landscaping, new or repair an existing swimming pool. Check with your renovation loan specialist to see which program allows the renovations you want. The FHA 203(k) has more restrictions than Conventional Renovation loans.

Question: Can the Borrower have a relationship with a Contractor(s)?

No. The borrower can have no relationship (familial or business or otherwise) with the Contractor(s). This is considered a conflict of interest and is not allowed on a 203(k) transaction.

Question: Is a property eligible for a 203(k) loan if it will be gutted with the foundation completely torn apart?

No. Demolished homes, or homes that will be demolished during rehabilitation, are only eligible provided the complete existing foundation is not affected and remains in place

Question: Can a Borrower pay for upgrades outside of the original scope of the project?

No, the Borrower cannot pay for upgrades (labor/materials) outside of the scope of the original project.