48 Meriden Rd, Suite 1, Middlefield, CT 06455




Renovating, remodeling, and repairing your home.

Why now?

In today’s purchase market, there are a lot of people looking for homes but, there is not a lot of inventory available. So, instead of leaving your home you own with or without a current mortgage, stay a while longer. If you do not have the cash on hand, there are a few options available to renovate your current home to be the home of your dreams.

What is a renovation loan?

Renovation loans can be utilized to update and repair your home by utilizing the current or future equity of the home to fund the work.

Option 1 – FHA Renovation Loans

Being a government program there are additional fees that are associated with these twp (2) options.

Standard 203k:

  • Repairs from $5,000 to 110% of the appraised value of the home after improvements
  • HUD consultant and general contractor required
  • Cannot be general contractor on your own loan
  • Borrower’s with not so great credit and higher debt-to-income ratio
  • Renovations on primary homes only

Limited 203k:

  • No HUD consultant required
  • Cannot be general contractor on your own loan
  • Less extensive, non-structural repairs totaling under $35,000
  • Value of home is the “as completed” appraisal with projected work

Option 2 – Homestyle Renovation Loans (conventional)

Similar to the 203k’s, costs of this option are a little less.

  • For borrower’s with stronger credit and lower debt-to-income ratios
  • Lenient with the kinds of repairs
  • If Single Family Residence, it can be a 2nd home or investment property
  • If multi-family, must be a primary residence
  • Repairs of $5,000 up to 50%-70% of the projected value after improvements (depending on the lender)

Option 3 – Cash-out Refinance (conventional and non-qm options)

  • Based on the current equity of the “as is” home value and borrower against the equity
  • Can borrow up to 80% loan to value (up to 90% with non-qm)
  • Home is used as the collateral to keep 1 monthly mortgage payment
  • Closing costs can be rolled into the loan but, will deduct from total cash out
  • No restrictions on the money
  • Appraisal Drive – Home has to appraise for this option to be viable

How to choose the best option:

If you are considering the renovation route, be sure to give me a call. I will take an application and carefully review your specific scenario. We can then base our decision on credit, the cost of the project debt-to-income ratios, etc…

Keep in mind that…

  • You want to have a realistic idea of timelines
  • You do not want to miss any extra costs in the estimate
  • You do not want to over-improve or improve in a way that is not beneficial to the value

In conclusion, there is a home improvement loan for almost every scenario. Approval and repairs will dictate which program will be most beneficial to you.


Ashley Socquet

Office: 844.788.7237 x7627

Email: Ashley@northeast-mortgage.com

NMLS#: 1848164