All About San Diego Renovation Loans.

Today, many homes listed for sale are in need of serious repairs or remodelling. Many buyers pass the opportunity to buy a home at a bargain price as they do not have the funds available to do the repairs. This scenario makes it perfect for San Diego Renovation Loans.

What is a renovation loan?

Renovation loan allows the buyer to take the benefit of bargain purchase by blending the cost of home with the renovation or remodelling costs all in one loan.

Types of renovation loan in San Deigo

1.        Fannie Mae Homepath renovation loan: The Fannie Mae homepath renovation loan is a special loan offered on Fannie Mae foreclosed properties. The loan is no mortgage insurance and the buyer can use this program on an owner occupied or investment property.

2.        FHA 203K renovation loan: This loan allows repairs up to 50% of the loan amount. It is usually used for major repairs and mortgage payments may be financed into loan if the house is uninhabitable.

3.     FHA 203K streamline: It is called streamline as it allows only specific amount of repairs to be financed into the loan and it limits the draws at closing to 2. The client can also add energy efficient mortgage of certain amount for installation and the purchase of energy efficient appliances, windows and insulation.

Gist of FHA 203K renovation loan

FHA 203K is a loan backed by the federal government and is offered to the buyers who want to buy a damaged or older home and do the repairs. The benefit of these Renovation Loans is that they give you the ability to buy a home that needs repairs that you might not otherwise afford to buy. Also, the down payment requirements are minimal and you get decent interest rates.

FHA 203K loan requirements

1.        There should be a minimum credit score of 500 or higher

2.        3.5% minimum down payment or 10% if the credit score is below 580

3.        43% to 45% debt to income ratio

4.    Renovation costs must exceed $ 5000 for standard 203K loan or less than $35,000 for limited 203K loan.

Wrap up

When looking for renovation loans in San Diego, it is imperative to collaborate with the loan specialist to help you avail the best loan options available.