St. Louis Mortgage Help

The Best FHA 203k Renovation Mortgage Lender in St. Louis MO

June 4th, 2019 3:02 PM by Bob Rutledge

WHAT IS A FHA 203k or HOMESTYLE RENOVATION MORTGAGE?

A renovation mortgage allows a home buyer to purchase a property and roll the cost of certain home improvements directly into the mortgage loan. This is not a second mortgage or separate line of credit. This is one mortgage, one interest rate and one monthly payment.

A renovation mortgage allows the home buyer to amortize the cost of renovations over the “life of the loan.” You get to spread the cost of a $20,000 kitchen remodel over your 30-year mortgage. The nice thing about doing it this way rather than a credit card or HELOC is that the work is tied to the equity of the home, so it becomes part of the future sale price if you’re considering moving someday. Home buyers have several choices when it comes to renovation mortgages.

HomeStyle Renovation is a financing option offered through Fannie Mae. According to Fannie Mae: The HomeStyle Renovation mortgage enables a borrower to obtain a purchase transaction mortgage or a limited cash-out refinance mortgage and receive funds to cover the costs of repairs, remodeling, renovations or energy efficient improvements to the property.

There are no required improvements or restrictions on the types of repairs allowed or a minimum dollar amount for the repairs. Repairs or improvements, however, must be permanently affixed to the real property and add value to the property. 

Learn more about the HomeSyle Renovation

FHA 203K Renovation, there are two separate types of FHA 203k Renovation Home Loans choosing which loan suits you best will depend on the amount and type of improvement your house needs.

Streamlined: The 203(k) Streamline or Limited is an all-in-one loan used for homes that need minor repairs. It allows borrowers to finance the purchase of an existing home and make improvements or upgrades up to $35,000 before move-in. There are no minimum repair costs and the borrower must occupy the property.

Standard: The Standard 203(k) is an all-in-one loan used when homes need major
rehabilitation, or when repairs are structural, involves landscaping, or when the renovation costs exceed $35,000. There must be a minimum of $5,000 worth of repairs, and again, the borrower must occupy the property. FHA loan limits are based on property type and location of the property being financed. A portion of the loan proceeds are used to pay the seller, or, if a refinance, to pay off the existing mortgage, and the remaining funds are placed in an escrow account and released as rehabilitation is completed. You may also roll in up to six months of mortgage payments if the HUD consultant determines you need to be displaced from the home during the repairs.

Learn more about the FHA 203k Renovation 

THE BEST MORTGAGE FOR TODAY'S HOUSING MARKET

In today's housing market that is experiencing very low inventories especially in the first time home buyer and first time move up markets being pre-approved for a renovation home loan like the FHA 203k, the Fannie Mae HomeStyle or a VA Renovation Mortgage is your best option to beat this low inventory housing market. 

Consider this very typical scenario for first time buyers, found in today’s home buying market: you’re tired of renting and you want to find your own house. As you begin to explore the neighborhoods in which you’d like to live, you find very few homes in your price range. Many of these homes are getting multiple above asking price offers, and they are not staying on the market very long. 

Many of the homes staying on the market are foreclosed, older, out dated, or in need of too much repair, homes up for sale. A house you would consider purchasing if it wasn’t for all the work needed to make it your home.

Many times, these homes are in such disrepair that they could barely be live in. Sometimes they’re missing things like appliances, the furnace or a water heater. But with prices what they are, it’s hard to walk away from these properties. Enter home improvement loans – also known as the Renovation Mortgage. You can take advantage of one of these programs and roll the cost of repairs, renovation, rehabilitation and home improvements into the mortgage and pay just one monthly payment. The
benefit to this is that you can then write off the interest on your taxes. You can’t do that when you finance the work and supplies on a credit card or store credit line.

Very often you are purchasing a new house that is priced below market value your first win in this situation. Then when you provide the extra touches to the home through your renovation project you are providing additional value to you home. Many times, once all the work is completed home buyers discover that the equity in their new home far exceeds their down payment.

Learn about the Renovation Equity Plan

The BEST Renovation Mortgage Loan Officer
The best renovation mortgage loan officer in St. Louis and St. Charles MO is of course Bob Rutledge with New American Funding. 

Bob Rutledge has been a mortgage loan officer for over 2 decades and I closed my first FHA 203k in 1998 and have closed 100s of them ever since. 

Knowing how the renovation mortgage works is not enough you must have multiple layers of experience with each renovation program. How to get them started to avoid the pitfalls that wait to create delayed closings and worse.

I have a well developed plan of action that starts with your pre-approval to insure we are well ahead of the process and when you find that house that will be your home we are well ahead of the process. My Renovation Mortgage Action Plan pretty much assures you, the real estate agents, and the seller that you will can close on time and far sooner than most lenders who are only trying to close a renovation mortgage.

BOB RUTLEDGE FHA 203k and RENOVATION MORTGAGE SPECIALIST

Let's Make an Appointment to talk, answer your questions and get you pre-approved. Here is a link to my Calendar to schedule a time and date that works for you for us to talk together; LET'S TALK or feel free to call me directly at 314-913-9678, visit my website www.bobrutledge.com where there is a lot of information on renovation mortgages or send me your questions:


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