Using a Renovation Loan to Secure your Next Home

As of late, the word “Denver” has become synonymous with high prices and low inventory. Even with a slight uptick in available homes in the Mile High City, it’s still tough out there for buyers. One option buyers might consider is an FHA 203(k) rehab loan, also referred to as a renovation loan, which allows homebuyers to finance both the purchase of a home as well as the renovation costs through a single mortgage.

A renovation loan is a fantastic option because it allows buyers to finance the cost of improvements into the purchase or refinance of a home, which takes the financial guesswork and frustration out of renovating.

For those who plan to purchase a fixer-upper, an FHA 203(k) loan may be the perfect solution. There are two types of FHA 203(k) loans:

  • Limited (formerly called streamline)
  • Standard

A limited FHA 203(k) loan is designed for cosmetic improvements and is capped at $35,000. This rehab loan can be used to finance repairs and improvements like a kitchen remodeling or a new paint job.

A standard FHA 203(k) loan can be used for extensive remodeling, but it requires you to hire a qualified 203(k) consultant to oversee every step of the work, from the plans to the finished product.

Although some restrictions and special rules apply, 203(k) loans can be used to purchase and refurbish condos, two-to-four unit properties, and mixed-use properties, in addition to single-family residences and homes in planned unit developments.

There are lots of homes in Denver that require a little TLC, and renovation loan is a great way not only to break into homeownership but possibly turn a diamond in the rough into the home! Contact Metrowest today – we specialize in distressed property sales and would love to help you start the process!

Ken Blevins

About Ken Blevins

Ken Blevins, CEO of Metrowest Real Estate Services, is a veteran in mortgage and default servicing with more than 24 years of experience in collections, foreclosure/bankruptcy, loss mitigation and real estate disposition (REO). Blevins was an original co-founder of Metrowest in 2003, a Real Estate Brokerage and Services Company focused on the resale, recovery and liquidation of distressed real estate in Denver, Colorado and surrounding metros. Blevins assumed the role of CEO in January 2014 and provides strategic direction and has management accountability for the day-to-day operations. Under his direction, Blevins drives all default management operations to maximize asset value recovery and reduce loss severity through a strategy focused on customer service and state of the art technology. Blevins has 18 years of direct operational experience in all facets of REO Asset Management having managed large national REO Disposition contracts for Fannie Mae, Freddie Mac, Wells Fargo, JP Morgan Chase, CitiFinancial, GMAC Mortgage and other various financial institutions. Blevins specialties include REO asset management, real estate investment, bulk REO acquisitions and distressed asset recovery and liquidation, and he has directed the resolution and liquidation of over ten billion in institutionally-owned residential real estate.

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