What is a Home Improvement Loan?

Houses

Are you looking to do a home renovation? Would you like to re-do your kitchen or baths?  Do you need new flooring?  You might want get a new roof or repair a damaged section of your house. Making improvements to your home can be very costly, and it can be hard to come up with thousands of dollars to pay the contractor’s. If you are looking to improve your home, but lack the necessary funds, consider applying for a Home Improvement loan.

Definition

Home Improvement loans, or FHA 203(k) loans, are a type of federally insured mortgage loans that are used to fund renovations and repairs. These loans can be made on a borrower’s primary residence for up to a maximum of 110% of the after improved value of your home. There is a minimum of $5000 of required repairs with no maximum (subject to FHA’s maximum loan limits). These loans can be made to refinance your existing home or purchase an existing home.

Requirements

Loan qualifications are the same as every other FHA forward mortgage.  A potential applicant will need to credit and income qualify. You will need to get an estimate from a state licensed contractor for all work to be performed. If total repairs exceed $35,000 or if repairs are of a health, safety or structural nature than a inspector form the Department of Housing & Urban Development will be required to supervise the repairs.

Getting the Loan

If you would like to see if you will qualify for a Home Improvement Loan, contact one of our Licensed Mortgage Loan Originators by clicking here.

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About

Marina is a Writer for NFM Lending. She got her Bachelor's in English from the University of Maryland. When she isn't writing or managing NFM Lending's social networks, Marina can be found shopping, cooking, and researching the latest gadgets.

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