A home improvement loan might be just the fix you need.

Whether you’ve found a fixer-upper in a great neighborhood or you want to make upgrades to your existing home, one of Embrace’s Ready for Renovation options could be the answer. We offer two types of 203(k) loans, the FHA Full 203(k) and the FHA Limited 203(k), along with Fannie Mae’s HomeStyle renovation loan.

Inventory is lower today than it was five years ago, making it harder to find a house you love in the neighborhood you desire. That’s why many homebuyers are jumping on fixer-uppers. A 203(k) mortgage can help you buy a home in most any condition, make immediate improvements, and pay for them over time. Depending on the financing option you choose, improvements can range from minor updates to more extensive remodeling and renovations, including bringing severely damaged or neglected properties up to habitable, insurable standards. With a 203(k) loan, you’ll have just one application, one loan approval, one closing, and one monthly mortgage payment.

203(k) renovation loans aren’t just for new homebuyers — they’re also for homeowners looking to upgrade their current living space. Instead of managing two different loans, you can finance the expense of home repairs or a remodel at the current low interest rates and refinance your mortgage in the process. And the loans can go as high as 110% of the after-improved value. Embrace offers built-in reno financing for homebuyers and homeowners who want to turn a promising before into their happily ever after.

FHA Full 203(k)

The FHA Full 203(k) lets you borrow up to 110% of the after-improved value to pay for an assortment of projects designed to remodel and repair single-family properties.

  • Structural alterations and reconstruction
  • Reconditioning or replacement of plumbing, heating, air-conditioning, and electrical systems
  • Elimination of health and safety hazards
  • Changes for improved functions and modernization
  • Roofing, gutters, downspouts
  • Flooring, tiling, carpeting
  • Appliances when at least $5,000 of basic home repairs are involved
  • Much more, including energy conservation, accessibility, and landscape work

FHA Limited 203(k)

An FHA Limited 203(k) lets you borrow up to $50,000 in additional financing to help pay for projects designed to remodel and repair single-family properties.

  • Repair/replace roofs, gutters, and downspouts
  • Repair/replace/upgrade existing HVAC systems
  • Repair/replace/upgrade plumbing and electrical
  • Repair/replace existing flooring
  • Minor remodeling that does not involve structural repairs (kitchen, bathroom, etc.)
  • Interior and exterior painting
  • Weatherization
  • Appliances
  • Accessibility improvements for persons with disabilities

 

Frequently asked questions

What kind of renovations can be made?

Depending on the financing option you choose, improvements can range from basic repairs to minor updates and upgrades to more extensive remodeling and renovations, including bringing severely damaged or neglected properties up to habitable, insurable standards.
Properties that are sold “as-is” often would not qualify for a standard FHA loan. 203(k) loans, however, are designed to improve, update, and modernize the home.
• Applicants must meet the standard loan program credit qualification requirements.
• The property must meet renovation loan requirements.
• An appraiser’s estimate of what the property value will be with completed improvements must support the mortgage amount.
• Down payment and closing cost requirements may vary depending on the loan type.
Getting a home appraisal is a standard part of the mortgage process. Lenders like Embrace will give customers a loan based on the appraisal value of the property they’d like to buy or refinance. Appraisals are conducted by 3rd party companies and are not influenced by Embrace Home Loans. Home appraisals are determined by comparing recently sold, comparable homes in the same neighborhood as your home or the home you are interested in purchasing or refinancing. The appraisal company provides a report to Embrace after the appraisal is conducted.  Quite simply, when you use a home for collateral for a loan, the lender wants an appraisal report to make sure the loan will be guaranteed by the value of the property.
Everyone's financial situation is different, so it’s important to figure out what you can comfortably afford to borrow, which depends on four factors:
  • Your debt-to-income ratio (your total monthly payments as a percentage of your gross monthly income)
  • Cash you have available for a down payment and closing costs
  • Your credit history
  • The value of the home you’re buying
How much home can YOU afford? Use our handy mortgage calculator and find out!
There are many great reasons for refinancing, including:
  • You’d like to lower your interest rate or monthly mortgage payments
  • You need cash, fast
  • You’d like to consolidate debt
  • You’re looking to shorten your payback term
  • You want to switch from a variable-rate to a fixed-rate mortgage to create regular, predictable payments
  • You’d like to get a variable-rate mortgage with better terms
"In my opinion it’s all about trust. Trust that Vickie is fair and will listen and explain whatever questions I have. It’s not that simple but she makes it seamless." - Fazle, VA
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