When looking for a new home, it can be tempting to look for a “fixer upper.” These houses are usually offered at a steep discount, allow buyers to get into the neighborhood they want, and can offer some unique customization options. Aside from a custom built new home, these can be the best way to really make a house your own. But paying for the repairs can be costly, and if you are working with a tight budget, it might seem out of reach to go this route.

Fortunately, FHA created a loan program called the FHA 203k loan. It is a FHA mortgage which allows you to borrow funds over the price you purchase the house in order to repair the home. I discussed this loan previously, but basically, an appraiser looks at your home’s current value, then compares that to what your home would be worth with the work you want to do completed, and we can write a mortgage based on that higher value. There are some stipulations, but it is a great way to buy a house that needs some work if you are short on cash.

But many of my clients who were interested in this did not want a FHA loan. So, Ross Mortgage has begun offering Fannie Mae Homestyle and Homepath Renovation Loans. These two loan programs now give you options in the home renovation mortgage space, and I will explain exactly how these new loan programs work on Thursday.

If you are looking to buy a house and have questions about home renovation mortgages or about how much you can qualify for, please contact me. If you have anything to add about home renovation mortgages, please leave a comment.