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A renovation mortgage could be the right loan product for you. If you're looking to purchase a home or renovate your existing home, you should consult Erin the Expert about your plans. She will be able to explain the different options available.

In this video, Erin tells us about the two types of FHA 203k renovation mortgage programs - how they are different, what they can be used for and the process for getting one.

Below are some notes, details and examples from this episode.

General guidelines

  • Can be used to
    • Purchase and repair a home that needs TLC
    • Finance the renovation of your existing home
  • 203k renovation loans are an FHA product which means 3.5% down payment (96.5% max LTV)
  • Can borrow against 110% of the after improved (end) value (see example)
  • Renovations can be up to 50% of after improved (end) value
  • Can be used to finance the cost of
    • Renovations
    • Permits
    • Inspections
    • Reserves
    • Additional closing costs.

Types of 203k Renovation Loans

  • Limited 203k
    • $35k max renovation
    • Good for roof, windows, bathrooms, kitchens
  • 203k standard
    • Projects over $35k
    • Good for comprehensive and structural repairs: additions, rebuilds, multi-room

You will need a 203k Consultant

  • Independent 3rd party
  • Reviews plans and pricing - Ensures financially feasible
  • Inspects work - Makes sure end result is safe and livable

Max Loan Amount Example

  • Value before renovations: $150,000
  • Renovation costs: $50,000
  • End value: $200,000 ($150,000 + $50,000)
  • 110% end value: $220,000 ($200,000 x 110%)
  • Max loan-to-value (LTV): 96.5% (3.5% down payment)
  • Max mortgage amount: 
    • $220,000 x 96.5%
    • $212,300
  • Minimum down payment (equity) required: $7,700
    • $220,000 x 3.5%

Additional Resources


Are you a first time home buyer?

Consider downloading our FREE homebuying guide specifically for those new to the process. It's packed with useful information, checklists and tip sheets to get you off on the right foot.


Are you ready to take the next step?

It's time to get pre-approved with Erin the Expert!

 

 

 

 


On November 27, 2018 the Federal Housing Finance Agency (FHFA) announced an increase in the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2019.
 
The maximum loan limit for one-unit properties will be $484,350, an increase from $453,100 in 2018. Release.
 
The decision was based on the recovery of housing prices under the Housing and Economic Recovery Act of 2008 (HERA). They require that the baseline conforming loan limit be adjusted each year for Fannie Mae and Freddie Mac to reflect the change in the average U.S. home price.  
 
FHFA third quarter 2018 House Price Index (HPI) reported that house prices increased 6.9%, on average, between the third quarters of 2017 and 2018. The baseline maximum conforming loan limit in 2019 will increase by the same percentage.
 
For areas in which 115% of the local median home value exceeds the baseline conforming loan limit, the maximum loan limit will be higher than the baseline loan limit.  
 
A list of the 2019 maximum conforming loan limits for all counties and county-equivalent areas in the country can be found here.
 
Contact your Greenway Mortgage loan officer today for more details about how the increase can impact you.

2019 Conforming Loan Limits Effective January 2019


On November 27, 2018 the Federal Housing Finance Agency (FHFA) announced an increase in the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2019.

The maximum loan limit for one-unit properties will be $484,350, an increase from $453,100 in 2018. Release.

The decision was based on the recovery of housing prices under the Housing and Economic Recovery Act of 2008 (HERA). They require that the baseline conforming loan limit be adjusted each year for Fannie Mae and Freddie Mac to reflect the change in the average U.S. home price.  

FHFA third quarter 2018 House Price Index (HPI) reported that house prices increased 6.9%, on average, between the third quarters of 2017 and 2018. The baseline maximum conforming loan limit in 2019 will increase by the same percentage.

For areas in which 115% of the local median home value exceeds the baseline conforming loan limit, the maximum loan limit will be higher than the baseline loan limit.  

A list of the 2019 maximum conforming loan limits for all counties and county-equivalent areas in the country can be found here.

Contact your Greenway Mortgage loan officer today for more details about how the increase can impact you. 

2019 Conforming Loan Limits Effective January 2019


For the Week Ending November 30, 2018

 

Please enjoy this quick update on what happened this week in the housing and financial markets.

 

Recent comments by Fed Chair Jerome Powell have markets questioning if we'll see policy rate increases in 2019, which could be good for mortgage rates.
Consumer spending increased by the most in 7 months in October. But underlying price pressures slowed, meaning inflation is less of a concern.
The economy grew 3.5% in the 3rd quarter, lower than the 2nd quarter's 4.2% expansion. Still, corporate profits reached a 6-year high. 

 

Despite moderation, September's annual home price gains remain strong at 5.5%, as reported by Case-Shiller. 
October's pending home sales dropped 2.6% from the previous month. Sales were down 6.7% compared with October 2017, for the 10th month of annual declines.
New home sales also fell in October. However, data last week showed an increase in building activity. A larger supply of available homes could bring more sales.

Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.


Discount points are also known as simply "points" - Laura is here with this week's Mortgage Term Monday video to talk about what they are. 

Connect with Laura


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