Financing Fixer-uppers

March 25, 2020

Real estate marketplace Zillow® found that 76% of Americans would rather renovate, if given a choice between a down payment for a new home or using that money to fix up their current home.*

AFR Wholesale™ serves this segment of the market with a comprehensive renovation loan catalog designed to address every financing situation. By providing these specialized products, you can expect to close more loans and grow your business, while providing a tailored experience your customers will appreciate.

From straight-forward renovation loans to products like USDA Renovation, which combines financing for the purchase of a fixer-upper with the cost of the necessary renovations into one loan, AFR Wholesale offers renovation products to satisfy any unique client situation. We should know, as the #1 203(k) lender for sponsored originations in the country.

Transform your clients’ home improvement dreams into reality by offering products like 203(k) loans or Fannie Mae Homestyle® to help them with large renovations to their new or existing home. Or, you can help borrowers capitalize on smaller renovation opportunities with products like 203(k) Limited or VA renovation loans, which your clients can use to fix up smaller things around the house.

FHA Loans for Fixer-uppers

An FHA 203(k) Rehabilitation Loan is a renovation loan that provides financing for both the purchase (or refinance) of a home, and the cost of repairs or updates to the home or property. This program can help a buyer transform a home, from foundation repairs or a new roof, to a kitchen remodel or outdoor deck – adding to their own enjoyment of the home and adding to its value at the same time.

As the nation’s leader in 203(k) sponsored originations, AFR can help provide the support and expertise to help you close these loans more confidently, so you can grow your business. Benefits of 203(k) loans include the ability to finance large renovations and structural changes, helping clients create their dream home, and an easy process with just one closing. Borrowers don’t need to requalify. And, you can provide Realtors the ability to sell more inventory.

With the FHA 203(k) Limited loan program, borrowers can finance smaller renovations and repairs in one loan.

Fannie Mae Financing

The FNMA Homestyle Renovation Mortgage allows you to provide your customer the freedom to purchase or refinance their home with necessary renovation funds included. This unique financing option requires no minimum dollar amount on repairs, provides one closing and a loan amount based on the “as-completed” value of the home. Unlike many other renovation programs, luxury additions like pools and patios are eligible.

Serving Those Who Have Served

Did you know AFR was one of the first lenders to make VA Renovation loan programs available? The VA Renovation program provides eligible borrowers with the option for no money down financing that covers not only the current value of the property, but the cost of remodeling and repairs, as well. Added bonus, AFR Wholesale pays any required VA Sponsorship fees for its brokers and correspondents on all AFR-related VA loan submissions.

Suite of Products for Special Repairs

AFR Wholesale lends a hand by providing a niche loan product tailored to their clients’ special circumstances.

The FHA 203(h) Mortgage Insurance for Disaster Victims program, for example, can provide assistance to borrowers in need of home recovery help. This specialty FHA loan program allows for 100% financing to help victims of disasters purchase a new home after their existing residence was substantially damaged. You can provide up to 100% LTV with flexible terms, while providing assistance to families during difficult circumstances.

The FHA 203(b) with Repair Escrow program allows insuring and additional financing of HUD-owned properties in need of repairs to meet minimum property standards. You can provide a borrower the ability to bring a home up to meet inspection standards, including repairs up to $10,000, and provide assistance to an under-served market area.

The USDA Repair Escrow allows for financing of minor renovation costs to a home that meets property standards, or where repairs could not be completed due to inclement weather conditions. To utilize this program, exterior and interior repair escrows combined should be under 10% of the final loan amount, and the livability of dwelling is not affected.

AFR Wholesale also offers the USDA Renovation program, which allows eligible borrowers in designated rural communities to combine the purchase of a home with any necessary renovations into a single loan. The program allows borrowers the flexibility to purchase a home they love, even if it needs some renovations to fit their family’s needs. And, they may be able to finance up to 100% based upon the ‘as-improved’ value, and even include the guarantee fee, better enabling hard-working citizens to improve the housing stock in the communities where they live and work.

AFR Wholesale specializes in niche products, allowing you to offer lending solutions for unique financial situations. Considering the current lack of affordable housing, it’s great to know you can find a way to help finance a family’s fixer-upper, with a complete suite of loans that give borrowers the ability to finance costs for everything from small repairs and simple updates to large-scale renovations into one low-rate mortgage. Families can buy or stay in a home they love, even if it needs a little love.

Visit AFR Wholesale’s program page for complete guidelines.

Photography by [Roman Zaiets] ©