Renovation Loans

At InterLinc Mortgage, we have an entire Renovation Department dedicated to helping you throughout the entire renovation process, allowing you to focus on having A HOME WHERE YOU WANT and then turning it into THE HOME YOU WANT! InterLinc Mortgage can finance the purchase, as well as the renovation costs in one, low-interest, 30-year fixed rate loan! With options for:

• Purchases
• Refinances
• 2nd Homes
• Investment Properties

Highlights Include:

• Choose your own contractor to do all the work (No Self Help)
• Options for no house payments during renovation period
• Conventional and FHA Renovation Programs

Look at what all a homebuyer can do with their Renovation Loan (depending on the specific loan program, contact us for full guidelines):

STRUCTURAL
• Add on to the house
• Repair structural damage
• New garage
• Finish Basement

LIVABILITY
• New Furnace and A/C
• New Septic System
• New Plumbing
• New Electrical
• Re-roof the House
• Repair or Replace Well
• New Driveway and Walkways
• Fences

LUXURY
• Remodel Kitchen
• Remodel Bathrooms
• New Flooring
• New Appliances
• Swimming Pools

HEALTH & SAFETY
• Creating accessibility for persons with disabilities
• Eliminating health & safety hazards

Or, tear the house down to the foundation and build it back up!

What is a 203(k)?

Most mortgage loan programs require a property to be in sound condition with no structural defects or required repairs. Not the 203k. This sub-type of the popular FHA loan is made for homes needing anything from a light spruce up to major repairs, improvements or new additions.

Combine the House AND the Needed/Wanted Repairs - The 203k loan covers your purchase price and the cost of improvements. The proposed work must be supported by a "value upon completion" appraisal. You can save by financing renovation costs into the original mortgage rather than racking up credit card bills or dipping into reserve savings later.

Create the Perfect House - If you're having trouble finding the right house in the right location, the 203k is the perfect solution. Just take a well-located home, add your own personalization and improvements, and make it "just right."

Determine Your Eligibility - As with the regular FHA program, credit requirements vary yet can be more flexible than with conventional financing. There are no income limits or first-time buyer status requirements.

Minimize Out of Pocket Costs - The 203k can be obtained with as little as a 3.5% down payment. Gifts can be used, sellers can contribute toward closing or costs can be rolled into the loan amount right along with your pre-paid taxes and insurance.

203(k) Renovation Loans allow homebuyers to finance additional funds into their mortgage to improve or upgrade their home before move-in.

LIMITED FHA 203(k)

No minimum cost of repairs
Any non-structural repairs/improvements which can be completed for less than $30,000 and do not exceed FHA mortgage limits are allowed
Renovation amount of $0 to $35,000
1 to 3 licensed subcontractors or 1 licensed general contractor
1 to 4 units allowed
Owner occupied only
3.5% down payment
640 Min FICO
No HUD consultant required

STANDARD FHA 203(k)

$5,000 minimum cost of repairs
Any repairs/improvements approved by FHA that do not exceed FHA mortgage limits are allowed
Renovation amount of $5,000.00 to FHA county mortgage limit
1 to 3 licensed subcontractors or 1 licensed general contractor
1 to 4 units allowed
Owner occupied only
3.5% down payment
640 Min FICO
HUD consultant required

HOMESTYLE®

No minimum cost of repairs
No restriction on repairs/improvements which are attached to the property and do not exceed 75% of the after improved appraisal value
Renovation amount of $0 to $726,200, not exceeding 75% of after improved appraisal value
1 to 3 licensed subcontractors or 1 licensed general contractor
1 to 4 units (owner occupied, 2nd home or investment property) allowed
Owner occupied, 2nd home and investment property (maximum 70% LTV)
3% down payment
620 Min FICO
HUD consultant required on projects with bids over $35,000 and/or structural changes/fixes

*Each type of renovation loan product requires a minimum 10% (of your bid total) contingency reserve. This is not a discretionary fund, but rather is held in reserve for unforeseen health and safety related issues that come up during the course of the construction. Any renovation repair escrow funds remaining at the completion of your project will be credited to you as a principal reduction. Your loan balance will be reduced accordingly, but your monthly payment will not change due to this credit. Information as of 01/04/2023.

Refinancing Your Renovations

Love your home again! When you refinance your current mortgage, using one of InterLinc Mortgage's renovation loans, you could have the home of your dreams with the added advantage of fewer costs by rolling your mortgage along with repair expenses into one single loan.

Fannie Mae HomeStyle®
Limited FHA 203K
Standard FHA 203K

Another available option is a cash-out refinance. This option is the refinancing of an existing mortgage loan, where the new mortgage loan is for a larger amount than the existing, and the borrower receives the difference between the two loans in cash. Basically, homeowners do cash-out refinances so they can turn some of the equity they've built up in their home into cash giving them more flexibility to:

• Finance educational expenses
• Make large purchases
• Make home improvements
• Take a dream vacation
• Get money for life's unexpected setbacks
• Pay off high interest credit card debt
• And much more!

The Home Renovation Process

Define Your Goals
Before you start making improvements to your home, it helps to have clear goals in mind. Consider if you are looking to raise the value of your home, make it more energy efficient, or want to make the home more functional to fit your needs. Prioritize a list of things you would like to accomplish during your renovation project.

Budget Your Renovation
Shop around for contractors with good reputations to get the best estimates to complete your planned project. You may also want to include a certain percentage of contingencies in your budget to cover any unexpected costs during your renovation.

Apply for a Home Improvement Loan
A home improvement loan application is much like a mortgage application. The application process can take several weeks, so plan to apply as soon as possible before you start a home improvement project.

Close the loan ? Complete Repairs → Move in

RENOVATION FAQ's

How much can I borrow?
This depends on your individual repair and improvement needs. It will also depend on the appraisal "as-is" and "after improved" value.

What repairs can I do?
Depending on your "needs" list, you can repair/replace and even add on to an existing home. Some renovation programs will also allow you to repair/replace or add "outdoor" items such as decks and patios.

Can I do any of the work myself?
All repairs need to be completed by a professional, licensed and insured contractor.

Can a family member do the work?
If they are licensed in the field that the repair is for and have liability insurance, YES, they most certainly can.

Where do I find a Contractor?
There are many options for researching contractors in your area. These include websites such as angieslist.com, homeadvisor.com, etc. Home improvement retailers such as Lowe's, Home Depot, etc. often offer contractor services.

How long will the renovation take?
All renovations need to be done in a timely manner. When you have completed your "Scope of Work" you can discuss this with your Renovation Specialist for a better idea of the time frame needed to complete renovations. Please note that all work must start within 30 days.