Renovation Financing

F&B Financial offers renovation loans that are part of a new and fast-growing loan program for home owners and home buyers. With a renovation loan, a borrower can finance the purchasing of a home and any renovation project costs into a single loan.

Depending on credit score history and other factors, two main types of renovation loans are available; the FHA 203k and Fannie Mae HomeStyle loan. F&B Financial Group also offers a proprietary loan program specifically for primary residence renovation projects. Learn more about each of our loan options and requirements below.

FHA 203k Rehabilitation Loan

The FHA 203k loan is an insured mortgage that allows buyers to borrow funds to purchase and rehabilitate a home. FHA 203k loans follow many of the same guidelines as other insured mortgage loans, such as the 203b FHA loan. Below are important features of the FHA 203k Rehabilitation Loan:

  • A borrower can finance all or a portion of the cost to rehabilitate a home. 
  • Borrowers are required to pay at least a 3.50% of the combined purchase price and renovation cost as part of a down payment.
  • The specific amount of the down payment will be determined by a maximum mortgage calculator where current income, debt, and expenses are taken into account.
  • The maximum loan amount is set by mortgage loan providers Fannie Mae and Freddie Mac.

Within the FHA 203k loan program there are two types loans borrowers may qualify for, the Streamline 203k and Full 203k loans. For each of these loans, the maximum amount of the loan is set by mortgage loan providers Fannie Mae and Freddie Mae. To learn more about each of the types of FHA 203k loans, please click here.

Learn more about the FHA 203k Renovation Loan

Fannie Mae HomeStyle Loan

The HomeStyle Renovation Loan is a single-close loan provided by Fannie Mae that enables borrowers to purchase a home that needs repairs or refinance the mortgage on their existing home and include the necessary funds for renovation in the loan balance. Below are important features of the HomeStyle Loan:

  • The loan amount is based on the "as completed" value, which is the value of the home once renovations are complete.
  • The maximum loan to value is 95% of the project cost or appraised value - whichever is less. 
  • The maximum loan amount is also equal to the conforming maximum loan amount per the county in which the subject property is located. 
  • Renovation costs are limited to 75% of the "as completed" appraised value of the home and may include labor and materials, soft costs, and a contingency reserve of 10% of the alteration amount. 
  • The maximum loan amount is set by mortgage loan providers Fannie Mae and Freddie Mac.

F&B Portfolio Renovation Loan

This loan program was designed by our internal credit committee to provide an alternative to the HomeStyle loan that caters to a more streamline process for higher loan amounts. We base the loan amount on the ARV (After Renovated Value) and do not require the involvement of a contingency reserve or a U.S. Department of Housing and Urban Development Consultant. Below are important features of the F&B Portfolio Renovation Loan:

  • The entire amount of renovation funds is disbursed to the title company/disbursing agent at closing.
  • The term of the loan is 9-12 months with extensions available.
  • The minimum loan amount is $150,000 and the maximum loan amount is $1,500,000 and interest only payments are due during construction. 
  • There is no Private Mortgage Insurance (PMI) regardless of the Loan to Value (LTV).
  • The borrower is responsible for the payment of real estate taxes and home owners insurance. 

Download our Renovation Financing brochure for more information. If you’re interested in applying for one of our renovation loans, please contact F&B Financial group so we can discuss your options with you.