Renee Morris
 |
|
|
|
What’s the difference between a “Standard 203k”, a “Limited 203k”, a Fannie Mae HomeStyle and a VA Renovation Loan?
For a line-by-line breakdown, please refer to our “Compare Your Options” chart above.
Do I have to submit a minimum number of bids?
We certainly recommend getting bids from several contractors; however, it is not required. We only need the final bid from the contractor you’ve chosen for the final renovation work.
Can I do the work myself, and borrow less money?
CFI does not allow any self-help.
Can my relatives do the work?
Unfortunately not. CFI requires an arm’s-length transaction.
Who picks the contractor?
Although we have preferred partners that we can recommend, it is up to you to make the final selection on which contractor you prefer to do the renovations.
Does the contractor have to be licensed?
We follow state or county requirements with regard to licensing of contractors. Your selected contractor not only has to be licensed, but properly insured, bonded, and have trade references as well.
Can I purchase appliances with a renovation loan?
Yes. But, be aware you will have to have cash or credit to complete the purchase of the appliances, and you will be reimbursed in the second draw once the work is complete.
How long does it take to close my loan?
Our recommendation is that you plan for 60 days from your contract date to close your loan. We work diligently and aim to close it as quickly as possible; however, because a renovation loan can get complicated due to a variety of factors and unexpected events, we ask for your help in being flexible on timelines.
Do I have to borrow a contingency reserve?
Yes, please refer to our “Compare Your Options” chart above to see contingency reserve requirements per loan type.
What happens to the contingency reserve if I don’t use it?
Once the projected renovations are done, any remaining contingency reserve will be applied to your principal loan balance.
Can I get cash out to pay off debt with a renovation loan?
Not for a 203k loan, VA loan or FNMA HomeStyle. Unfortunately, these loans only allow for a purchase and renovation amount (and closing costs if you are refinancing to renovate your house and your project qualifies). Getting cash-out is not allowed.
If you are refinancing your current home to use the equity for remodeling, a cash-out is the primary goal of the transaction and a great option for existing homeowners.
Where can I get more information?
Contact us today!
Financing Flexibility:
| Common Questions | |
|
|
|
|
|
|
|
Most property types except Co-ops, condohotels. Some property types are not eligible for certain programs. Some property types also require the loan to be underwritten at the investor. |
|
|
|
|
|
Underwriting turn times are less than 2 days, generally 24 hours. Most loans close between 21 to 27 days depending on the loan and contributing variables. |
|
|
|
|
|
Yes, we have seasoned processors that will provide you with a needs list within 1 day. |
|
|
|
|
|
The cost is $595 per closed loan and is collected on the LE/CD. |
|
|
|
|
|
Yes, we offer in house underwriting. Some programs or properties might require 2nd level review. Plus, You have access to discuss files with your underwriters. |
|
|
|
|
|
We have a transition team to help you. |
|
| 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 | $453,100 | $453,100 | $453,100 |
| Maximum Loan-to-Value | 96.5% | 96.5% | 100% | 95% | 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 – Expands Home Purchase Choices! | Purchase or Refinance – Expands Home Purchase Choices! | Purchase or Refinance – Expands Home Purchase Choices! | Purchase or Refinance – Expands Home Purchase Choices! | Refinance |
| Renovation timeframe | 6 months | 6 months | 4 months | 6 months | N/A |
| Eligible properties | Primary Residence – Single Family Residence, PUD, FHA approved Condo, 2-4 units & REO | Primary Residence – Single Family Residence, PUD, FHA approved Condo, 2-4 units & REO | Primary Residence –
1 or 2 units |
Primary Residence, 2nd Home, Investment Property and condos | Primary Residence – Single Family Residence, PUD, FHA approved Condo, 2-4 units & REO |
| Down Payment Requirement | 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 | N/A | 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.
$35,000 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 $35,000 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. | 100% of the “subject-to” appraised value. | 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 | |
*Please Note: Details above constitute a condensed overview of guidelines and are not an exhaustive list. Consult your Loan Officer for all restrictions and guidelines pertaining to your situation as not all guidelines are listed.