In today’s episode we will talk about including your remodel cost into your mortgage loan and the minimum requirements. If you have been in the market to buy a home, you have probably noticed that new construction homes have smaller lots without RV Parking, a nice size backyard or a pool.

But what if you find the perfect home in a great location with a nice size lot but the inside looks dated and overall, not your style. Well, we have a solution for that.

Renovation Loans

FHA, Conventional and VA loans allows you to buy a home and include the remodel cost into your loan amount if you meet the minimum requirements.

FHA Loans

You have two types of loans. The most common one is a Limited 203(k) Rehab FHA Loan which allows you to finance up to $35,000 of non-structural repairs inside the home. Mostly cosmetic repairs, appliances and small room conversions or upgrading your air conditioning unit, water heater or heating system. You must hire a general contractor, and your lender will pay 50% upfront and 50% at completion. The home must be appraised with an as-is value and an estimated value after repairs.

If you want to buy a property and preform structural type of work, major landscaping work, replace the roof, add/remove rooms or enhance the home for accessibility purposes, you want to apply for a full FHA 203(k) Rehab Loan that will allow you to do all of the above and more.

The minimum FHA Loan Requirements

  • Have your 3.5% down payment of the purchase price.
  • Minimum Credit Score of 580.
  • Make sure home passes FHA safety and health standards after all repairs are done.
  • Employment, credit and asset qualifications apply as well.

Conventional Loans

There are two loan products available. Fannie Mae offers HomeStyle Renovation and Freddie Mac offers CHOICERenovation® which allows you include the purchase of your home and the cost to remodel the inside and outside of the home up to 75% of the as-is value. The minimum credit score is 620 and minimum down payment is 5%. You also need to hire a general contractor that is licensed and insured. Payment is made 50% upfront and 50% at completion.

VA Loans

The VA Renovation Loan product is available for eligible veterans that are going to occupy their home as a primary residence, minimum credit score of 620 and can be used on your first home purchase or subsequent. You can include up to $35,000 in repairs. You also need to hire a general contractor that is licensed and insured. Payment is made 50% upfront and 50% at completion.

Our Open House

In our open house we give you an idea of the type of upgrades you could add onto your loan on a property that is already beautiful but perhaps needs a boost to match your style. We went to Arizona Title and Lowes for ideas.

Visit Arizona Tile at to find a location near you.