One World Realty in Jacksonville Florida
Charles Gaulden

FHA 203k or Fannie Mae conventional renovation loan

  • How much renovation can you do on a FHA 203k or Fannie Mae conventional renovation loan?  As far as the Scope of Work, you can literally take a home down to the foundation and build it back up from scratch. The only cap on the dollar amount of work has to do with appraised values, buyer qualifying and FHA county loan limits/Conventional loan limits.
  • Appraised Vale  – on FHA 203k you get up to 110% of the after-improved value. Conventional appraisals are standard with no buffer.
  • FHA loan limits – In Northeast FL the limit is $387,500 for SFR (after down payment).
  • Conventional loan limits – $417,000 (after down payment). Higher limits for 2-4 unit properties.
  • On Conventional Renovation loan what are some luxury items that are allowed? Swimming Pools, Summer Kitchens, Landscaping, work on Docks & Bulkheads, etc. Call for specific details or scenarios.
  • What are the benefits of HomePath mortgages? The biggest benefit has to do with condos since Fannie Mae HomePath condos do NOT require approval
    and there is NO appraisal.  For investors on HomePath the minimum down payment is just 10%, and for those buyers who want to perform all the repairs/improvements themselves, since there is no appraisal then can close and then start the work. NOTE – HomePath Renovation loans require appraisals and have different down payment requirements.
  • When writing a CONTRACT for an FHA 203k or Fannie Mae Conventional Renovation loan what additional information needs to be included? Generally, you will write the contract As-Is (not always for resales) for the sales price of the house. Just check “FHA” or “Conventional” like all transactions. Its best practice to note in “Other Terms & Conditions” that the “Buyer to use FHA 203k / Fannie Mae Homestyles Renovation loan to address property conditions”. There are times with a resale that you might write a clause involving value but not on REO or short sale properties.

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