What is a Renovation Mortgage?
Finding the perfect home in St. Louis, MO can sometimes feel like searching for a needle in a haystack. But what if you could take a house with great bones and transform it into your dream home? That is exactly where a renovation mortgage comes into play.
A conventional renovation loan allows you to finance both the purchase (or refinance) of a property and the cost of its repairs into a single mortgage. Instead of taking out high interest personal loans or draining your savings, you get one convenient monthly payment. At Better Rate Mortgage, we understand that every homebuyer has unique needs. Whether you are looking at a purchase plus improvements renovation mortgage or need a second opinion on a loan you have already started, our expert team led by Sean Zalmanoff is here to help.
Fannie Mae HomeStyle vs. Freddie Mac CHOICERenovation
When exploring a conventional renovation loan, you will likely encounter two main options: the Fannie Mae HomeStyle loan and the Freddie Mac CHOICERenovation loan. Both programs offer incredible flexibility, but they have slight differences in how they handle project approvals and property types.
- Fannie Mae HomeStyle: This program is incredibly versatile. You can use it for almost any type of renovation, from structural repairs to luxury upgrades like a new swimming pool. It is available for primary residences, second homes, and investment properties.
- Freddie Mac CHOICERenovation: Similar to HomeStyle, this option allows for extensive repairs and upgrades. It is particularly great for financing renovations that help properties withstand natural disasters or improve energy efficiency.
If you are exploring government-backed options as well, you might want to compare these conventional paths to an FHA 203k renovation loan. However, conventional options typically offer higher loan limits and more flexibility for luxury upgrades. Getting a second opinion on your conventional renovation loan is crucial, and our St. Louis team specializes in reviewing your options to ensure you get the best possible terms.
| Feature | Fannie Mae HomeStyle | Freddie Mac CHOICERenovation |
|---|---|---|
| Property Types | Primary, Second Home, Investment | Primary, Second Home, Investment |
| Allowed Repairs | Any structural or cosmetic (including pools) | Structural, cosmetic, disaster resilience |
| Loan-to-Value (LTV) | Up to 97% for primary residences | Up to 97% for primary residences |
| Consultant Required? | Yes, for structural or large projects | Yes, for structural or large projects |
Why Choose Better Rate Mortgage for Your Renovation Loan?
Choosing the right lender for your renovation mortgage is just as important as choosing the right contractor. At Better Rate Mortgage, we pride ourselves on delivering a better mortgage experience from beginning to end for our St. Louis clients.
We are experts at providing second opinions on conventional renovation loans. If you have been told a project cannot be done or the rates seem too high, let Sean Zalmanoff and our team take a look. Plus, when you get preapproved with us, your offer is backed by our $5,000 guarantee. If your financing falls through, we pay the seller $5,000. This gives you a massive competitive edge in the local real estate market.
Q1: What is a conventional renovation loan?
It is a single mortgage that covers both the cost of buying or refinancing a home and the cost of renovations.
Q2: Can I use a renovation mortgage for an investment property?
Yes, both Fannie Mae HomeStyle and Freddie Mac CHOICERenovation allow financing for investment properties and second homes.
Q3: How does this differ from an FHA 203k loan?
Conventional renovation loans typically have stricter credit score requirements but offer higher loan limits and allow for luxury improvements like swimming pools.
Q4: Do I need a special contractor?
You must use a licensed and insured contractor. You cannot do the work yourself unless you are a licensed contractor by trade.
Q5: Can Better Rate Mortgage give me a second opinion on my loan?
Absolutely. Our St. Louis team specializes in reviewing existing loan offers to ensure you are getting the best terms for your renovation mortgage.
Ready to turn that fixer-upper into your dream home?
