Renovation Loans

Fannie Mae’s Homestyle Renovation mortgage, VA’s Renovation, and FHA’s 203(k) and (FHA 203K Streamline) loan programs are designed to finance the purchase and renovation of your home, all in one loan.
The first thing most people want to do when they buy their home is – “make it theirs”. Renovation requires new carpet, paint, update the kitchen, and bathrooms. But most cases the new home owner often lacks the money to do all that they want to do. The only way to get what they want is to run up high interest credit cards.

Service First Renovation Lending has a better way!
Add the amount of money you need to renovate your new home to your low interest 30 year fixed rate mortgage. A renovation mortgage will help your sellers sell their home without having to do a thing to it. A renovation mortgage through Service First Mortgage Services will finance both the purchase as well as the cost of the renovation all in one low interest, 30 year fixed rate mortgage.
We never have a prior to close appraisal requirement. The house could be in shambles with broken windows, missing roofing shingles, peeling paint and structural damage. Your sellers can sell this home to a first time home buyer with as little as 3.5% down and not have to spend a dime on the house.
The home buyers can renovate the home exactly as they want it to be after closing with ample funds to get all the work done by professional contractors.
If you were the seller of a property who did not have the money or time to fix up your home, would you choose a realtor that needs to have a whole list of repairs done, or would you choose a realtor who says “leave it like it is, don’t spend a dime on this house” and market the home as a “Ready4Renovation” property?
It just makes sense and sellers understand the benefit of not spending money on a house they are selling. Buyers love the fact that they can choose the improvements they want, not what the seller thought they wanted.

Here is how it works:
At Service First Renovation Lending, you have specialists to help you through the entire process.
The Service First Mortgage Loan Officer gathers the information needed to submit your mortgage loan application, and works with you, hand in hand through the process from loan approval to closing your loan “On Time and As Promised.”
The Service First Renovation Specialist works with the loan officer and you to make sure that there are ample funds to complete your renovation project. The Renovation Specialist continues to assist you after closing, overseeing draw payments, inspections and final close out of the renovation account.

Your designer or contractor assists you in designing a renovation project that will create the home of your dreams and lasting value.
The HUD Consultant is an independent inspector who works with you to ensure all of the work completed on the property meets the requirements of the Federal Housing Administration insuring your mortgage loan. The HUD Consultant also prepares a work write up for the contractors to bid on. After closing they conduct the draw inspections and prepare the draw request.

How the renovation process works:
• Get pre-qualified for a mortgage loan with a Service First Mortgage Loan Officer.
• Find the neighborhood you want to live in.
• Choose a home listed for sale that has the most potential to be what you want. It may be the house in the worse condition and most likely the lowest price in the neighborhood. This is perfect!
• Call the Service First Renovation Lending loan officer so his team will coordinate with your designer or contractor to help you decide what you want done and the estimated cost.
• Sign a purchase contract (allowing 45-60 days for closing).
• Submission of income, asset and other documentation needed to complete the submission and approval of you mortgage loan. (Even better – provide this information at pre-qualification)
• Request and receive bids from contractors for the renovation work needed and submit to the renovation specialist. The HUD Consultant will coordinate a meeting at the property with you to review what needs to be done and help with the contractor bid process.
• The renovation specialist will validate the credentials of contractors you select, and the bids submitted.
• The appraisal is ordered, the loan is submitted to underwriting for approval.
• The mortgage loan is closed according to the schedule on the purchase contract.
• An interest bearing, renovation escrow account is set up for your renovation.
• Renovation work can begin immediately after closing.

The Renovation:
• After closing the work must begin within 30 days of closing and be completed on the pre-determined schedule established prior to closing. The sooner the project is complete the better for everyone involved.
• As the contractor completes each phase of work, a draw payment can be paid for the completed work. The HUD Consultant prepares a draw request based on the contractors billing. You approve the draw by signing it and submit it to our renovation specialist. Within 10 days the contractor receives payment. Ten percent (10%) of each payment is held back to protect you in the event the contractor does not fulfill the contracted obligation
• Upon completion of the project, the HUD Consultant conducts a final inspection and draw request.
• You confirm the project is complete and that you are satisfied with the work performed.
• Our renovation specialist close out the renovation escrow account and if there are any funds remaining in the account, applies the remainder to the principal mortgage balance.
• A final appraisal inspection is ordered to document that all work was completed as specified.
• You are paid the interest earned on the renovation escrow account while it was open.
• The contractor is paid the 10% retained and obtain a final lien release.
• A final title search is also order to confirm that the property is free and clear of mechanics or material liens.
• The process is complete.

Helping your buyers and sellers with the Service First Renovation Mortgage is the smart way to buy and sell.