Renovation Loans in California FHA 203k, Fannie Mae, Freddie Mac
Renovation Loans in California
Renovation loans let you finance a home purchase or refinance while rolling in the cost of repairs or upgrades. Instead of paying for improvements out of pocket, you can include them in your mortgage. Popular options include the FHA 203k (Limited & Standard), Fannie Mae HomeStyle, and Freddie Mac CHOICERenovation loans.
Whether you’re fixing up a starter home, upgrading your current property, or making an investment property more valuable, these programs can help you get the funding you need without draining your savings.
What is an FHA 203k Loan?
he FHA 203k is a government-backed mortgage for buyers and homeowners who want to finance renovations as part of their mortgage.
Limited 203k: Up to $35,000 for non-structural repairs (paint, flooring, kitchen/bath remodels, etc.).
Standard 203k: Larger projects, including structural changes, additions, and major systems. Requires a HUD consultant.
Key Features:
Low down payment (as little as 3.5%)
Credit scores as low as 580 may qualify
One loan covers purchase/refinance + repairs
Fannie Mae HomeStyle Renovation
The HomeStyle loan lets you finance nearly any type of renovation, including luxury upgrades not allowed by FHA.
Key Features:
Available for primary residences, second homes, and investment properties
Minimum 5% down for primary homes
Renovations must be completed within 12 months of closing
Uses the “as-completed” appraised value to determine your loan amount.
Freddie Mac CHOICERenovation
CHOICERenovation works similarly to HomeStyle, with flexible guidelines and the ability to combine with other Freddie Mac products.
Key Features:
Can be used for disaster repairs and improvements to make a home more resilient
Allows multi-unit properties and certain manufactured homes
Down payment requirements vary by occupancy and credit profile
Common Questions and Answers
What are renovation loans?
Renovation loans let you finance both a home and the improvements it needs in one mortgage.
Who offers renovation loans?
Banks, credit unions, and mortgage lenders approved for FHA, Fannie Mae, and Freddie Mac programs.
Which banks offer renovation loans?
Many national and local banks, as well as online lenders. It’s best to compare rates and experience with renovation financing.
What are home renovation loans?
They are mortgages that bundle the cost of a home purchase or refinance with renovation funds.
Are renovation loans a good idea?
Yes, if you want to spread renovation costs over time at mortgage rates instead of higher-interest credit cards or personal loans.
Are renovation loans hard to get?
Not if you meet the credit, income, and down payment requirements for FHA, Fannie Mae, or Freddie Mac loans.
What are the renovation loan limits?
Loan limits depend on the program. FHA limits follow county FHA caps, while Fannie Mae and Freddie Mac follow conforming loan limits.
How do renovation loans work?
Your lender approves the purchase price plus renovation budget. Funds for repairs are held in escrow and released as work is completed.
Can you get renovation loans for investment property?
Yes, Fannie Mae HomeStyle and Freddie Mac CHOICERenovation allow investment property financing. FHA 203k is for owner-occupied homes only.
Are there home renovation loans?
Yes. The three main types are FHA 203k, Fannie Mae HomeStyle, and Freddie Mac CHOICERenovation.
What are renovation loans?
It’s based on the lesser of (purchase price + renovation cost) or the “as-completed” appraised value, subject to loan limits.
Can renovation loans cover DIY work?
Most programs require licensed contractors, but some may allow limited DIY if you can prove experience and cost savings.
Links
Contact
Armando Novelo
NMLS 237243
Super Mortgage Bros
1900 W. Garvey Ave S. #100
West Covina, CA 91790
Phone: (626) 200-1838
Next Workshop
An FHA 203k loan is a government-backed loan program designed for homebuyers and homeowners looking to finance a home purchase or refinance while also financing the cost of renovations. The Limited 203k is designed for minor repairs, while the Standard 203k allows for more extensive work, including major structural repairs. Both loan types have specific requirements, but they provide a convenient way to make your dream home a reality.
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