Renovation

Want to restore your home, or purchase a home that needs a little—or a lot—of improvement? Let's make your dream a reality, today. At Fitzgerald Financial Group, we offer several products that can help fund minor or major renovations. Renovation loans help you save time and money by allowing you to acquire a loan that covers the acquisition and rehabilitation of the property.

Renovation Loan Options

FHA 203(k)

FHA 203(k) Standard Mortgage: The 203(k) Standard Mortgage is a rehabilitation loan, backed by the FHA, that allows homebuyers and homeowners to finance both the purchase (or refinance) of a house and the cost of the home’s rehabilitation in one mortgage. 

Eligible Activities Include:

  • Structural alterations and reconstruction, such as the relocation of a load-bearing wall
  • Modernization and improvements to the home's function
  • Elimination of health and safety hazards
  • Changes that improve appearance and eliminate obsolescence
  • Reconditioning or replacing plumbing; installing a well and/or septic system
  • Adding or replacing roofing, gutters, and downspouts
  • Adding or replacing floors and/or floor treatments
  • Major landscape work and site improvements
  • Enhancing accessibility for a disabled person
  • Making energy conservation improvements

FHA 203(k) Limited Mortgage: With the FHA Limited 203(k) program, you can finance up to $35,000 into your mortgage to repair, improve, or upgrade your home. The streamlined 203(k) is designed for homebuyers and homeowners who want to make more minor cosmetic and health and safety property repairs or improvements, such as those identified by an inspector or appraiser. Use the FHA 203(k) limited program to make your new home move-in ready by remodeling the kitchen, bathrooms or bedrooms, painting the interior or purchasing new hardwood floors.

Eligible improvement types include, but are not limited to:

  • Roof repairs
  • Elimination of health and safety hazards
  • HVAC work
  • Painting
  • Flooring replacements or repairs
  • Purchase of appliances
  • Weatherization
  • Basement waterproofing
  • Window, door, or exterior siding replacement
  • Septic/well repair or replacement
  • Accessibility improvements
  • Health and safety

HomeStyle® Renovation Mortgage: The HomeStyle Renovation Mortgage is a mortgage loan backed by Fannie Mae that allows homebuyers and homeowners to finance improvements for up to 50 percent of the "as completed" appraised value of the property. The HomeStyle Renovation loan can be used for any renovation project, such as updates, design improvements, or to construct or renovate living spaces such as an in-law suite or basement apartment. Renovations must be permanently affixed and add value to the property.

Eligible improvement types include, but are not limited to:

  • Interior and exterior renovations
  • Fences
  • Decks
  • Landscaping
  • In-ground pools

FAQS

IS THE 203(k) PROGRAM RESTRICTED TO SINGLE-FAMILY DWELLINGS?

No. The program can be used for up to four unit dwellings and condominiums. (Contact lender for specifics related to condos).

CAN AN INVESTOR USE THE 203(k) PROGRAM?

No. In October, 1996, the department placed a moratorium on the investor participation in the 203(k) rehabilitation program.

IS THERE A TIME PERIOD ON THE REHABILITATION CONSTRUCTION PERIOD?

Yes, the rehabilitation loan agreement contains three provisions concerning the timeliness of the work. The work must begin within 30 days of execution of the agreement. The work must not cease prior to completion for more than 30 consecutive days.

The work is to be completed within the time period shown in the agreement (not to exceed 6 months); the lender should not allow a time period longer than that required to complete the work.

WHAT HAPPENS IF THE COST OF THE REHABILITATION INCREASES DURING THE REHABILITATION PERIOD?

Can the 203(k) mortgage amount be increased to cover the additional expenses?

No. This emphasizes the importance of carefully selecting a contractor who will accurately estimate the cost of the improvements and satisfactorily complete the rehabilitation at or below the estimate.

CAN COST SAVINGS ON THE REHABILITATION BE GIVEN BACK TO THE BORROWER?

No. However, the standard 203(k) allows the savings to be transferred to cost overruns in other work items or to be used to make additional improvements to the property.

If the cost savings are not used, the money must be applied to the mortgage principal, but the mortgage payments will remain the same, because the loan has already closed.

To use the cost savings, it will be necessary for a Change Order to be completed and approved by the lender. The Limited 203(k) requires the cost savings to be applied to the principal.