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If I buy a fixer upper where can i get money to renovate?

I want to buy a home that is under my budget but it would need a lot of renovations. Since the bank will only loan me money for the price of the house, where can I get money for the renovations? Can I get a reno loan?
Asked By Tu F | Kill Devil Hills, NC | 805 views | Buying | 1 year ago
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Novice
1 Answer
Pam Smith

JP and Associates Realtors

(54)

There are a number of really good options for you. Depending on your credit score and whether you go FHA or conventional, you could look into the FHA 203(k) loan for major renovations, or the FHA 203(k)(s) loan for renovations that are more cosmetic in nature. If you wish to get a conventional loan, Fannie Mae offers the HomeStyle Renovation Loan. Another couple of conventional loan options: Freddie Mac offers the CHOICERenovation Loan and the CHOICEReno eXPress loans. All those products allow you to borrow money based on the purchase price plus the expected cost of the renovations, with down payments as low as 3% of the the total expected cost. Visit with your lender to determine which loan product is best for you.
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Pro
91 Answers
Lisa and Greg Harris

eXp Realty, LLC

(42)

There are options. It all depends on what the circumstances are..... if it is owner-occupied, there is a 203K FHA Loan Option..... It does have some requirements and you need to find the right lender to go on this path. I have seen investors if looking to flip, borrow from their own 401K in order to borrow from themselves, and then repair when it sells. I have seen some banks do a personal loan depending on the amount and your credit. I have seen hard money lenders come into play however, those often come with interest and fees that you will need to factor into your overall numbers if you are flipping the property and if you are holding it to rent or owner occupy, the hard money lender may not be the best option. There are some grants occasionally available through counties, I would check with your local lenders and a local REALTOR to see if they have this info and these are usually for owner-occupied properties only. I even had a client that owed nothing on a car and did a refi on a car because the interest was so low that it made sense with a local credit union.... and then just paid it over time... So ALL of this depends on what your end goal for the property will be......

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Semi-Pro
47 Answers
Glenda X Bozett

RELI

(2)

There are many loan programs that will help with this, so be sure to ask your lender.
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Semi-Pro
44 Answers
Gloria Mitchell

Wilkinson Triad Realty

(52)

Depending on the extent of the renovation project you wish to complete, financing can come from several different sources. The most common sources of financing for home renovations include home equity lines of credit (HELOCs), cash-out refinances, and access to personal savings. Additional funding may be available through grants, low-interest loans, and government energy efficiency incentive programs. Additionally, depending on your credit score and income, private lenders may also offer personal or commercial loans to fund your renovation project.
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Semi-Pro
42 Answers
Brian DiMaggio

Atlanta Communities

(23)

There are some loan programs that will help with this, so be sure to ask your lender. Hard-money may be an option, albeit an expensive one.
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Rising Star
11 Answers
Sean Black

LUXE Properties

Yes you can, you can also reach out to family and friends but make sure you disclose to the bank if you are borrowing outside of them.
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Novice
4 Answers
Daniel Cacich

Coldwell Banker Real Estate Group

(64)

FHA has a program called a 203K that will provide the funds to renovate. A little cumbersome. Make sure you choose a lender the is familiar with this program. There are several Conventional Rehab programs available to. You will need to check for a lender that offers those.
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Novice
4 Answers
Chris Hoffman

Lehigh Valley Just Listed, LLC

I lot of agents are mentioning the FHA 203K program, which is a good program. However, there is a conventional version of that program called a Convetional Homestyle loan. Its a little mroe felxible, and may give you a better chance of securing a property, if you are in a multiple offer situation. You will need to find a repuatble lender who has experianc and knowledge, specifically with a Conventional Homestyle loan.
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Novice
3 Answers
Holly Brink

Epique Realty F06526000

(141)

You can get funding for renovating a fixer-upper through various sources, including traditional bank loans, home renovation loans, personal loans, and grants. You can also explore crowdfunding platforms and home equity lines of credit (HELOCs) to finance renovations. Some fix and flippers find "hard money lenders." Additionally, you can research local or state grants for homeowners needing renovations.
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Novice
1 Answer
Hugo Lopez

Century 21 Alliance Realty

(2)

You can get a renovation loan (called 203K) or you can get a hard money lender, once you finish the Reno you can refinance.
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Novice
1 Answer
Hugo Meza

eXp Realty LLC

(20)

If you are buying as an owner-occupant, you go get a renovation loan (fha203K). I also heard some lenders do VA renovation loans. Other ways to get money would be from your circle, family or friends. You can also apply for hard money loans and private loans.

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