Mortgage Loans that Help with Renovations

Home renovations can be a little daunting, but financing them doesn’t need to be.  Homebuyers considering a fixer-upper and homeowners thinking about doing major rehab work might want to consider an FHA 203K loan.

Often called rehab or renovation loans, 203K loans differ from traditional mortgage loans.  Buyers who want to purchase a home in need of repair usually have to secure a loan to buy the property, get additional financing to complete the renovation and then get a permanent mortgage to pay off the interim loans.  FHA 203K loans are made based on the ‘after-repair’ value and include an escrow account, in which the money is dispersed in draws as the necessary renovations are being completed.