Yes, it is possible to get a home loan that includes renovations. There are several options available for financing home improvements alongside a mortgage loan. Here are a few common methods:
FHA 203(k) Loan: The Federal Housing Administration (FHA) offers the 203(k) loan program, which allows borrowers to purchase a property and finance the cost of renovations into a single mortgage. This type of loan is popular for homebuyers who want to purchase a fixer-upper and make necessary repairs or improvements.
HomeStyle Renovation Loan: This loan program is offered by Fannie Mae and enables borrowers to finance both the purchase or refinance of a home and the cost of renovations. HomeStyle Renovation loans typically require a down payment and follow conventional mortgage guidelines.
Home Equity Loan or Home Equity Line of Credit (HELOC): If you already own a home, you can tap into your home's equity through a home equity loan or HELOC to finance renovations. These options allow you to borrow against the value of your home and use the funds for various purposes, including home improvements.
Refinance with Cash-Out: If you have equity in your home, you can consider refinancing your existing mortgage and taking out a larger loan amount to cover the cost of renovations. This is known as a cash-out refinance, where you receive the difference between your current mortgage balance and the new loan amount in cash.
It's important to note that the availability and terms of these loans may vary depending on your location, financial situation, and the lender's requirements. It is advisable to consult with multiple lenders or mortgage professionals to explore the best options available to you based on your specific circumstances.