Home Renovation - CFI Mortgage

THE ULTIMATE RENOVATION LENDING GUIDE

Why a Renovation Loan?

You don’t have to walk away from that fixer-upper or outdated home. There are many loan options available to create the home you’ve always dreamed of with the house you have! Whether you’re building a new addition* or just remodeling the kitchen, we have the loan program for you.

Types Of Loans

FHA 203(k) Standard or Limited Renovation Loans

FannieMae’s HomeStyle Renovation Mortgage

VA Renovation loans

Cashout Refinances

These loan options give you the ability to finance the renovation in one of two ways:

Roll it all into the total loan amount of the new home purchase with one loan closing
Leverage your current home equity to fund the project with a cash-out refinance

The FHA 203(k), VA Renovation loan and FannieMae HomeStyle® loan options let you purchase or refinance with one closing. Here’s how it works: the estimated renovation expenses are put into an escrow account and paid out to the contractor as the construction is complete and inspected.

Who can benefit from a renovation loan?

First Time or Move up Home Buyers
Current Homeowners
Investment Property Owners

Which Renovation Loan is right for you?

FHA Standard 203(k)

FHA Limited 203(k)

VA Renovation

Fannie Mae HomeStyle®

	FHA Standard 203(k)	FHA Limited 203(k)	VA Renovation	Fannie Mae HomeStyle®	Conventional Cash-Out
Minimum Credit Score	640	640	620	620	620
Maximum Loan Amount	County Limits	County Limits	$510,400	$510,400	$510,400
Maximum Loan-to-Value	96.5%	96.5%	100%	95%(Up to 97%))	80%
Loan Category	Government	Government	Government – guaranteed by the VA	Conventional – Fannie Mae	Conventional – Fannie Mae
Loan Type	Single Loan Renovation	Single Loan Renovation	Single Loan Renovation	Single Loan Renovation	Cash-Out Refinance
Loan Purpose	Purchase or Refinance	Purchase or Refinance	Purchase or Refinance	Purchase or Refinance	Refinance
Renovation time frame	6 months	6 months	4 months	6 months	N/A
Eligible properties	Primary – Single Family Residence, PUD, FHA approved Condo, 2-4 units & REO	Primary – Single Family Residence, PUD, FHA approved Condo, 2-4 units & REO	Primary Residence – 1 or 2 units	Primary Residence, 2nd Home(90% max), Investment Property(85% max Purchase ans 75% max Refi) and condos	Primary Residence – Single Family Residence, PUD, FHA approved Condo, 2-4 units & REO
Down Payment Required	3.5% Down, may be gifted	3.5% Down, may be gifted	0%	5% Minimum Down	N/A
Contingency Reserve	A minimum of 10% and a maximum of 20% in contingency reserves for repair costs is required.	A minimum of 10% and a maximum of 20% in contingency reserves for repair costs is required.	15-20% based on renovation costs	10-15%	N/A
Draw limits	Up to five (5) total draws allowed in a six month period	No more than one (1) draw is allowed.	Up to three (3) total draws allowed in a four month period	Up to five(5) total draws allowed in a six month period	N/A
Allowable Improvements	Structural alterations and additions, kitchen or bath remodel, replace roof and much more! (No luxury items)	Kitchen or bath remodel, replace roof, upgrade heating, replace plumbing, windows, doors and much more! (Structural work not allowed) $35,000 cap must include fees. (No luxury items)	Cosmetic and minor remodeling. Must be minor and non-structural. $50,000 cap includes required contingency and re-inspections. (No luxury items)	Must be built-in and add value – LUXURY items such as outdoor BBQ & pools allowed!	N/A; Home must be safe, sound and structurally secure according to conventional standards prior to closing.
Minimum in repairs	Minimum $5,000 in repairs	No minimum dollar amount in repairs, Maximum of $50,000 including fees	No minimum renovation cost; Maximum of $35,000 including fees	No minimum dollar amount in repairs. Renovation cost is limited to 75% of the “as-completed” value.	N/A
Plan Requirements	Work Write-Up required	Work plan provided by borrower required. Work Write-up NOT required	Work plan provided by borrower required. Work Write-up NOT required	N/A	N/A
Loan Amount	Based on the sales price or as-is appraised value + repair amount OR 110% of the “as-completed” value, whichever is less.	The lesser of the as-completed value of the acquisition cost is used when determining the maximum loan amount. On either a purchase or refinance. If the acquisition cost exceeds the as-completed value, the difference must be accounted for in documented borrower funds at closing. The loan amount is limited to eligible costs and cash back to the borrower is not allowed. Must use worksheet.	The loan amount is based on total LTV derived from lesser of: · Total acquisition cost including all construction related expenses · Or from the ‘as completed’ value of the home	Up to 80% of appraised value

FHA Standard 203(k)

FHA Limited 203(k)

VA Renovation

Fannie Mae HomeStyle®

Conventional Cash-Out

Minimum Credit Score

640

620

Maximum Loan Amount

County Limits

$510,400

Maximum Loan-to-Value

96.5%

100%

95%(Up to 97%))

80%

Loan Category

Government

Government – guaranteed by the VA

Conventional – Fannie Mae

Loan Type

Single Loan Renovation

Cash-Out Refinance

Loan Purpose

Purchase or Refinance

Refinance

Renovation time frame

6 months

4 months

6 months

N/A

Eligible properties

Primary – Single Family Residence, PUD, FHA approved Condo, 2-4 units & REO

Primary Residence – 1 or 2 units

Primary Residence, 2nd Home(90% max), Investment Property(85% max Purchase ans 75% max Refi) and condos

Primary Residence – Single Family Residence, PUD, FHA approved Condo, 2-4 units & REO

Down Payment Required

3.5% Down, may be gifted

5% Minimum Down

N/A

Contingency Reserve

A minimum of 10% and a maximum of 20% in contingency reserves for repair costs is required.

15-20% based on renovation costs

10-15%

N/A

Draw limits

Up to five (5) total draws allowed in a six month period

No more than one (1) draw is allowed.

Up to three (3) total draws allowed in a four month period

Up to five(5) total draws allowed in a six month period

N/A

Allowable Improvements

Structural alterations and additions, kitchen or bath remodel, replace roof and much more! (No luxury items)

Kitchen or bath remodel, replace roof, upgrade heating, replace plumbing, windows, doors and much more! (Structural work not allowed) $35,000 cap must include fees. (No luxury items)

Cosmetic and minor remodeling. Must be minor and non-structural. $50,000 cap includes required contingency and re-inspections. (No luxury items)

Must be built-in and add value – LUXURY items such as outdoor BBQ & pools allowed!

N/A; Home must be safe, sound and structurally secure according to conventional standards prior to closing.

Minimum in repairs

Minimum $5,000 in repairs

No minimum dollar amount in repairs, Maximum of $50,000 including fees

No minimum renovation cost; Maximum of $35,000 including fees

No minimum dollar amount in repairs. Renovation cost is limited to 75% of the “as-completed” value.

N/A

Plan Requirements

Work Write-Up required

Work plan provided by borrower required. Work Write-up NOT required

N/A

Loan Amount

Based on the sales price or as-is appraised value + repair amount OR 110% of the “as-completed” value, whichever is less.

The lesser of the as-completed value of the acquisition cost is used when determining the maximum loan amount. On either a purchase or refinance. If the acquisition cost exceeds the as-completed value, the difference must be accounted for in documented borrower funds at closing. The loan amount is limited to eligible costs and cash back to the borrower is not allowed. Must use worksheet.

The loan amount is based on total LTV derived from lesser of: · Total acquisition cost including all construction related expenses · Or from the ‘as completed’ value of the home

Up to 80% of appraised value

THE ULTIMATE RENOVATION LENDING GUIDE

Why a Renovation Loan?

Types Of Loans

Which Renovation Loan is right for you?

FHA Standard 203(k)

FHA Limited 203(k)

VA Renovation

Fannie Mae HomeStyle®

Fannie Mae HomeStyle®

Need help? Call our support team at (866) 869-0008

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Purchase With Renovation

Refinance With Renovation

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