Get A Home Improvement Loan with NO Equity

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Do you need to upgrade your home but you have little to no equity to borrower against?  If so, you might be eligible for an FHA 203(k) Renovation loan.  You can finance up to 97.75% of the value of your home and then add the proposed home improvements.

Luxury additions such as outdoor kitchens and high-end spas are not eligible, but many upgrades are. Here are some of the repair and remodeling projects that can be financed with a 203(k) loan:

  • Reconstruction or other structural changes
  • Updating and improving your home’s function
  • Eliminating health and safety hazards
  • Improving your home’s appearance
  • Replacing your home’s plumbing
  • Installing a well and/or septic system
  • Adding or replacing roofing, downspouts, or gutters
  • Adding or replacing flooring
  • Making site improvements or adding landscaping
  • Adding handicap access
  • Green renovations or energy conservation projects

The maximum refinance loan amount (subject to FHA loan limits) is the lowest of these three calculations:

  • Your current mortgage(s) on the property plus      rehabilitation and certain closing costs.
  • The current property value plus rehabilitation costs.
  • 110% of the improved value multiplied by FHA’s 96.5%      maximum loan-to-value ratio.

Two appraisals are required — one to determine the “as-is” or current property value, and the other to get an “improved value.”