- Loan programs
Home improvement loans have never been easier! Whether you are buying a new home or refinancing a home you already own, you pick the contractor and we’ll provide the financing. Finance home improvement projects such as kitchen and bath remodels, new flooring, exterior home improvements, finishing a basement, or adding a new home addition. You can finally have that master suite you’ve been dreaming about and expand your kitchen to include a new island for more counter space. Give your home a facelift with updated siding and a new roof. Add a new garage or install a swimming pool. The options are limitless! With a renovation loan, you can finance these home improvements into your mortgage – enjoy the convenience of having only one loan with one monthly payment.
If you have questions, we have answers! This section is dedicated to answering commonly asked questions about the renovation loan process. For more information, submit an inquiry and a DRMC Mortgage Loan Officer will be in touch shortly.
A renovation loan is a first lien mortgage that allows you to purchase or refinance a home and finance repairs. One loan, one monthly payment.
FHA requires a minimum of 3.5% down. On an FHA 203(k) loan, the minimum down payment required would be 3.5% of the purchase price plus total renovation costs.
Fannie Mae requires a minimum of 5% down in most cases. If you are a first-time homebuyer, you may be able to put down as little as 3%. For more information, contact a Diamond Residential Mortgage Corporation licensed Mortgage Loan Officer. The minimum required down payment would be 3-5% of the purchase price plus total renovation costs.
Yes, as long as they are eligible repairs allowed by HUD on FHA 203(k) loans or Fannie Mae on conventional renovation loans. However, you may be required to finance repairs for any health or safety issues, and for structural deficiencies before you can add any elective home improvements. For more information, contact a Diamond Residential Mortgage Corporation licensed Mortgage Loan Officer.
Most 1-4 unit properties are eligible for renovation financing, as long as the owner intends to reside in one of the units. Historical homes, modular homes, homes in a Planned Unit Development (PUD), townhomes are all eligible. Some condos may be eligible. For more information, contact a Diamond Residential Mortgage Corporation licensed Mortgage Loan Officer.
On conventional renovation loans, unfinished new construction homes may be allowed as long as they are at least 90% completed.
Second homes are allowed on conventional renovation loans.
Manufactured homes are not allowed.
It generally takes about 60 days to close a renovation loan. Oftentimes, the most lengthy task centers around your ability to find a contractor and obtain a bid.
You are responsible for selecting the contractor you wish to hire, but the contractor must meet all local and state requirements to perform the work. We will confirm they carry the proper liability insurance coverage and Worker’s Compensation coverage (if applicable). We will also confirm they hold any licenses or certifications required. We will check your contractor’s past customer, supplier, and trade references.
On FHA 203(k) loans, you may not be related to the contractor and the contractor may not be related to any other party to the transaction.
Some self-help is allowed such as minor demo work, interior painting, installation of appliances and clean-up. Speak with your Diamond Residential Mortgage Corporation licensed Mortgage Loan Officer for confirmation you can do some of the work.
On FHA 203(k) loans, this is generally not allowed. HUD requires the work as outlined in the bid to be performed after closing by the contractor who provided the bid during the loan process. If a health or safety issue arises during renovation, discuss the situation with Diamond Residential Mortgage Corporation.
On HomeStyle® Renovation loans, you may be able to make minor changes to the scope of work. Clear any changes to the scope of work with Diamond Residential Mortgage Corporation first, otherwise, you may not be reimbursed for the extra costs.
You may terminate your contract with the contractor under certain circumstances. Before you do so, discuss the situation with Diamond Residential Mortgage Corporation. We will walk you through any steps you are required to take which may include giving the contractor advance notice and time to remedy any deficiencies.
Ability to purchase a distressed home at a discounted price
Low down payment financing options
Low-cost way to finance home improvements
One monthly payment for property and repair costs
Ability to leverage future home value for financing
Gain equity by making home improvements
Select your own finishes
Tax-deductible mortgage interest (consult with your tax professional)
Takes longer to close than traditional loans
You must make decisions quickly (e.g. selection of contractor, materials)
Contractor cooperation is essential to vetting process
Do-It-Yourself (DIY) options are limited
Unexpected costs during renovation