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What's the HomeStyle Renovation Loan?

Before and After pic of home remodeling projectHave you found a neighborhood where you'd like to live but the only house for sale is a fixer-upper? Unsure what to do? You could: 


  1. Buy the house and make improvements a little bit at a time, as your budget and time allow, which unfortunately can take YEARS.
  2. Take a pass and keep looking. Who knows, maybe you'll find another great neighborhood just like this one.
  3. Buy the house with a HomeStyle Renovation Loan and get the funds you need to finance the mortgage and cover the costs of repairs or renovation.

The challenge with buying and making improvements a little at a time means you're living in a substandard home for years (popcorn ceilings, wood paneling, bathroom carpet). It also means you can't do the work until you've saved the money, further delaying your project. Or, if you choose to charge it on a high-interest credit card, in addition to your monthly mortgage payment, you've got to pay the credit card bill as well. Not too appealing, is it?


You could choose to keep looking. Who knows, maybe you'll find another really nice neighborhood with tree-lined streets, an excellent school district, and a coffee shop within walking distance. You just never can tell.


Or you could snatch up the house at below-market value and get the funds you need to buy the home and cover the costs of repairing it or renovating it with a HomeStyle Renovation Loan. The beauty of this type of mortgage is that you can bundle the costs of buying a home with the expense of remodeling it and make a single monthly mortgage payment. This eliminates the need for a second mortgage, home equity line of credit or other, most costly methods of financing. The loan amount you receive is based upon the estimated value of your home AFTER renovations are made (up to 75% of the "as completed" home value). There are no required improvements or restrictions on the types of repairs allowed or a minimum dollar amount for the repairs. Repairs or improvements, however, must be permanently affixed to the real property and add value to the property.



How it works:


ONE. Find a home.

TWO. Choose a contractor.

THREE. Get a bid for the work.

FOUR. Get an appraisal based on future value once renovations are complete.

FIVE. Close the loan and start remodeling.

young couplesHighlights:


Properties financed with a HomeStyle mortgage can be a one- to four-unit primary residence, a one-unit second home, a one-unit investment property, a manufactured home or a unit in an eligible planned unit development (PUD), condo or co-op project.

  • Buy and remodel or refinance your current mortgage and remodel
  • 5% minimum down payment for primary, single-family residences* (10% for second homes)
  • You can use gift funds for down payment and closing costs for owner occupied, primary residences after you contribute a minimum 3% down payment
  • 3% seller contribution allowed
  • Cosmetic and structural renovations allowed
  • Allowable improvements can include landscaping, appliances, swimming pools and more

Work you can do:

  • Kitchen/bath renovations
  • New appliances
  • Room additions
  • Swimming pool and spa
  • Landscaping
  • New flooring, painting
  • Basement remodel
  • New roof
  • Structural changes and more!

The HomeStyle is a conventional home loan which means you'll need to meet the basic credit and income requirements to qualify (good credit score and lower debt-to-income ratio) for the traditional mortgage. And while it lets you finance primary, vacation and rental properties, if you put less than 20% down you'll be required to pay private mortgage insurance. If you're looking for a renovation loan with more flexible lending requirements, check out our 203(k) renovation loan. Or compare the 203(k) to the HomeStyle Loan to find the one that best fits your needs.


With the HomeStyle loan you can add an extra bedroom, remodel the bath or take down a dining room wall. To help you get started, we've put together this handy ebook that can answer all of your questions about buying a home with a renovation loan. It's yours, free!


Our Ultimate Guide  to Renovation Loans


*A 5% down payment will require approval from Amerifirst Financial Corp. management. Down payment and other figures shown are for informational purposes only and are not intended as an advertisement or commitment to lend. Not all borrowers will qualify; contact us for a specific quote and more information on fees and terms.

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