Loan Program
The house that has sat on the market for ninety days is usually the one that needs work — and it is usually the one nobody can finance. A renovation loan solves that by lending against the value the home will have once the work is finished, not the state it is in today.
An appraiser values the property twice, in effect: as it stands, and as it will be once the approved scope of work is complete. You borrow against the second figure, which is what makes buying a house that needs thirty thousand dollars of work possible without thirty thousand dollars in the bank.
For cosmetic work and modest repairs there is a streamlined option with a lower limit and much less paperwork. For structural work, additions or anything requiring permits and a full scope, there is a standard version that involves a consultant overseeing the project. Which one you need is determined by the work, not by preference.
The lender reviews and approves your contractor and the bid before closing, and pays out in stages against inspected work. Contractors unfamiliar with renovation lending sometimes balk at that. Ones who have done it before are worth finding, and we can usually point you at them.
Renovation loans take longer to close and involve far more documentation than a straight purchase — the scope, the bids, the consultant, the draws. In a competitive market that is a real disadvantage on a hot listing. Where they win is on the house nobody else can finance, which is often exactly where the value is.
An FHA renovation loan that finances the purchase and the repairs in one mortgage, underwritten against the home's after-repair value.
Generally no. Renovation loans require licensed contractors, with limited exceptions for genuinely qualified self-help borrowers.
Yes. Fannie Mae and Freddie Mac both offer renovation products, which avoid FHA's lifetime mortgage insurance and are often the better choice for stronger credit.
Tyler McCain is based in Lebanon, TN and works across the Nashville metro.
Tyler McCain is licensed in Alabama, Florida, Kentucky, Ohio, Tennessee and Texas. Programme rules are federal, but the markets are not.
3.5% down with flexible credit — the workhorse first-home loan.
Read more →One close, from the slab to the certificate of occupancy.
Read more →As little as 3% down, with mortgage insurance that comes off.
Read more →Lower the rate, drop the mortgage insurance, or pull cash out.
Read more →That depends on numbers we have not seen yet. Two minutes, no credit pull, and Tyler will tell you straight — including if the answer is a different programme entirely.
