Orlando Renovation Loans
Orlando Renovation Loans for renovating or fixing a home
Tired of looking at outdated or fixer upper homes to buy? No extra money to fix them up? Here is a solution you may not have considered. Orlando Renovation Loans or “Rehab” loans allow you to finance future home improvements in your loan.
Ideally, to do Orlando renovation loans, you would want purchase a home under market value. During the transaction process you would get fix up costs from contractors. The repair estimates then would be provided to the appraiser so they can determine what the property value would be with the new improvements.
Orlando renovation loans will be based on a percentage of your purchase price plus the renovation costs. You would then close on the home and have access to fix up money. The lender would provide the money either at once or in draws so that the home is renovated within a certain time frame.
Types of Orlando Renovation Loans
FHA 203K Streamline: This program is for light rehab: replacing roof, HVAC, flooring, painting, appliances, minor kitchen remodels, window or septic system plus a few more. This type of Orlando renovation loan would be for cosmetic changes, not structural. The maximum allowance for repairs or renovations is $35,000. Maximum loan amount 110% of appraised value after renovations completed. Minimum 3.5% down payment.
FHA 203K Standard: This type of Orlando renovation loan program allows for structural alterations and additions: adding a garage or an entire kitchen or bathroom remodels. This Orlando renovation loan can also be used to install appliances, repair a swimming pool, or make upgrades to heating, air conditioning, plumbing, electrical, roofing, painting, energy conservation and more.
This Orlando renovation loan requires a HUD consult to work the paperwork with the contract for the appraisal. The repairs and renovations can go beyond $35,000. Maximum loan amount 110% of appraised value after renovations completed. Minimum 3.5% down payment.
Fannie Mae Homestyle: This Orlando renovation loan has no restrictions on the type of home improvements, but it must add value to the property. Maximum funds (including soft cost, contingency reserves, and payment reserves) cannot exceed 50% of the estimated completed value of the property. This Orlando renovation loan can also be used for an unfinished new construction property that is at least 80% completed. HUD consultants are required on these loans. Minimum 5% down payment. Here is a good tutorial of the Homestyle Loan process.
More on Orlando Renovation Loans…
Benefits to review when considering Orlando Renovation loans.
- Finance Repairs and home upgrades
- Renovate in the way you want
- Renovations add value to property
- Make the home more energy efficient
- Low Down payment
- Can be used for purchases and refinancing
Orlando Renovation Loans details
These Orlando renovation loans are more complicated and take a special type of buyer. In order to have smooth loan process, consider these tips when doing Orlando renovation loans.
- You must use an experienced loan officer or mortgage broker with a track record of closing Orlando renovation loans.
- You must have time. These Orlando renovation loans are administratively time consuming during the transaction, and execution of renovations.
- You should use General Contractors that are experienced with doing these loans and writing appraisal/lender friendly reports, as well as payment schedule.
- Your closing costs for Orlando renovation loans will be higher than with a traditional conventional or FHA loan as this is a labor intensive loan for the lender.
- You need to understand the Orlando renovation loans specifics. The buyers eligibility (primary home vs. second home vs. investor), minimum amount of renovations, ineligible repairs/renovations, loan restrictions, and time frames for completion.
Buyers Broker of Florida not only finds homes for buyers, but they can suggest possible financing options. Do not buy a home without a buyer broker on your side to navigate the home buying and financing process. 407-539-1053.