Houston rehab loans offer necessary funding for a variety of remodeling projects. Three of the most common are federally insured, but there are still a variety of others that are offered through credit unions and regional banks. Renovation loans are generally made to borrowers who are moving into their primary residence but can also be used for investment properties. Read on to learn more about Houston rehab loans and the basics of how they work.
Houston rehab loans include those backed by the federal government, which are the FHA 203k loan, HomeStyle loan by Fannie Mae, and the choice renovation loan by Freddie mac. As mentioned above, there are other loan programs that may or Nelly not be federally insured, that are typically available through regional Banks and credit unions.
The FHA 203k loan is only for primary residences, and cannot be used for luxury items, so things like a swimming pool or jacuzzi could not be part of the renovation project. Typically, this loan requires a down payment of as much as 10% but could be as low as 3.5% if the applicant meets the minimum credit requirements.
The homestyle loan by Fannie Mae can be used to purchase and remodel a primary residence, vacation or second home, or investment property. Funds must also be used for essential renovation and not for luxuries. Meanwhile, the CHOICE Renovation loan by Freddie Mac is designed to remodel properties that are out of date and rehabilitation to bring them up to date.