What is a Renovation Mortgage?
If you have found the perfect neighborhood in Urbandale or the greater Iowa area but the house needs major updates, a renovation mortgage might be the perfect solution.
A conventional renovation loan allows homebuyers and current homeowners to finance both the purchase or refinance of a home and the cost of repairs through a single mortgage. Instead of taking out a high-interest personal loan or draining your savings, you can roll the costs into one convenient monthly payment. We highly recommend looking into a purchase plus improvements renovation mortgage if you want to turn a fixer-upper into your dream home.
- Roll purchase and renovation costs into one loan.
- Based on the as-completed appraised value.
- Ideal for major remodels, additions, or structural repairs.
At The Tyler Osby Team at Fairway Independent Mortgage, we are experts at providing second opinions on conventional renovation loans. If you have been told a project is not possible, let our experienced team take a look.
Fannie Mae HomeStyle vs. Freddie Mac CHOICERenovation
When exploring a conventional renovation loan, you will typically choose between two primary programs: the Fannie Mae HomeStyle loan and the Freddie Mac CHOICERenovation mortgage.
The Fannie Mae HomeStyle renovation mortgage offers incredible flexibility. You can use it for virtually any repair or upgrade that is permanently affixed to the property. This includes luxury items like swimming pools or outdoor kitchens, which are often restricted under other loan types.
The Freddie Mac CHOICERenovation loan is another excellent option designed to help borrowers finance renovations alongside their home purchase. This program is particularly useful for upgrading a home to withstand natural disasters or for making energy-efficient improvements.
How do these compare to government-backed options? While conventional products offer higher loan limits and luxury upgrades, some buyers might benefit from an FHA 203k renovation loan if they have lower credit scores. Our team in Urbandale is happy to help you weigh the pros and cons of each program.
| Feature | Fannie Mae HomeStyle | Freddie Mac CHOICERenovation | FHA 203k |
|---|---|---|---|
| Minimum Down Payment | 3% to 5% | 3% to 5% | 3.5% |
| Eligible Properties | 1 to 4 units, condos, second homes | 1 to 4 units, condos, investment properties | 1 to 4 units, primary residence only |
| Luxury Repairs Allowed? | Yes (e.g., pools, landscaping) | Yes (with some restrictions) | No (health and safety focus) |
| Appraisal Basis | As-completed value | As-completed value | As-completed value |
Why Work With The Tyler Osby Team in Urbandale?
Securing a renovation mortgage requires a lender who understands the intricacies of construction financing. The Tyler Osby Team is proud to be the most recommended mortgage lender in Iowa. We have helped countless families in Urbandale and beyond secure the funding they need to build their perfect homes.
We are experts at providing second opinions on conventional renovation loans. If another lender has denied your application or given you terms that do not feel right, reach out to us. We will review your scenario and find out if a Fannie Mae HomeStyle or Freddie Mac CHOICERenovation loan can work for you.
Call us at 15159917102 or email tyler@tylerosbyteam.com to schedule your no-obligation consultation today.
Legal Licensing Information: Fairway Independent Mortgage Corporation, NMLS #2289. Tyler Osby, NMLS #8668, State of Iowa License #19545.
Q1: What is a renovation mortgage?
A renovation mortgage is a single home loan that covers both the purchase price or refinance amount of a home and the cost of planned renovations.
Q2: Can I use a conventional renovation loan for an investment property?
Yes, certain programs like the Freddie Mac CHOICERenovation loan allow investors to finance repairs on investment properties.
Q3: How is the loan amount determined?
The loan amount is based on the as-completed appraised value of the home, which is the estimated value after all planned renovations are finished.
Q4: Are luxury upgrades permitted with these loans?
Yes, the Fannie Mae HomeStyle loan allows for luxury upgrades like swimming pools and custom outdoor living spaces, provided they are permanently affixed to the property.
Q5: Do you offer second opinions on renovation loans?
Absolutely. The Tyler Osby Team specializes in providing expert second opinions to ensure you get the best conventional renovation loan for your needs in Iowa.