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    In today’s housing market, where inventory is short and mortgage rates are climbing, your buyers may start looking toward fixer-uppers — properties a bit more affordable but needing a little home improvement TLC.

    Sometimes, though, those can be hard sells.

    Maybe the kitchen is outdated, or it needs a new roof. Maybe the master is small, or there aren’t rooms for an elderly parent or baby on the way. Maybe they just don’t like the style or features.

    Fortunately, these are all fixable issues — at least with the right mortgage loan.

    Are your clients eyeing fixer-uppers more and more these days? Here’s how a renovation loan may be able the help.

    Renovations loans are specifically designed for rehabbing and renovating single-family properties in need of some home improvement work. They cover both the cost of purchasing a home as well as the costs of any repairs and renovations, too.

    This is a great way to buy fixer-uppers, make the necessary repairs right away, but spread those costs out over time (as much as 30 years, if you take out a 30-year mortgage). It’s all done using one single loan and one single closing.

    Embrace offers three types of renovation loans, including the FHA Full 203(k) loan, the FHA Limited 203(k) loan, and the Fannie Mae HomeStyle loan. Here’s how those differ:

    • FHA Full 203(k): FHA 203(k) loans ​​go up to 110% of the home’s after-repair value, which is based on a professional appraisal and estimates from a licensed contractor. You can use the funds for any common renovation cost such as structural updates, replacing plumbing, heating, AC, or electrical systems, roofing, flooring, and even appliances.
    • FHA Limited 203(k): With a Limited 203(k), you can get up to $50,000 in extra funds to cover more minor updates, like repairing the roof, painting, weatherizing the home, or updating HVAC systems. You can also make accessibility improvements to the property.
    • Fannie Mae (FNMA) HomeStyle: HomeStyle loans let you borrow up to 97% of the property’s after-repair value, with a maximum of $647,200 in most markets. You can use the money to renovate anything permanently affixed to the property. 

    Make fixer-uppers an easier sell

    If you have clients considering fixer-uppers or a property in need of a minor home renovation, get in touch with an Embrace Home Loans office in your area about getting a personal loan today. A home renovation loan such as an fha 203k loan may be able to help seal the deal.

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