We have many clients who utilizing the Renovation / Remodel loans Supreme Lending offer.  We are able to help clients with three different program options; FHA 203k, Fannie Mae Homestyle Renovation loan, and the One Time Close Construction loan.  I will briefly describe each program below.  If you have any questions on the programs, please feel free to give us a call, text or email.

FHA 203k:  This loan can be used for both purchases and remodels.

  • loan limit:  326,600 in Hennepin County
  • credit scores down to 640
  • debt to income ratios up to 50%
  • allowable for 1-4 unit owner occupied properties (3.5% down payment)
  • 3.5% minimum down payment
  • uses 'future value' appraisal to determine the loan to value limit of 110%
  • must be existing home structure that is being renovated.  It can not be from the dirt up construction.
  • renovation funds held in escrow at closing to be drawn upon by the contractor for the project.
  • one time close loan

Fannie Mae Homestyle Renovation Loan:  This loan can be used for both purchases and remodels.

  • loan limit:  424,100 in MN
  • credit scores down to 680
  • debt to income ratios up to 45%
  • allowable for owner occupied, second homes, investment property
  • max of 10 properties used for Homestyle Renovation
  • minimum down for owner occupied 5% (contact us for second home and investment prop down payment requirements)
  • uses 'future value' appraisal to determine the loan to value limit of 95%
  • must be existing home structure that is being renovated.  It can not be from the dirt up construction
  • renovation funds held in escrow at closing to be drawn upon by the contractor for the project.
  • one time close loan

One Time Close Construction Loan:  This loan can be used for both purchases and remodels.

  • loan limit:  $3,000,000 in MN
  • credit score vary on loan amount but typically 700 and higher
  • debt to income ratios 43%
  • allowable for owner occupied and limited second homes
  • mininmum down 5% if withing conforming loan limits.  Down payments on the jumbo construction loans are determined by examing credit score, loan amount, debt to income and reserve requirements.  Typically, we are at 10% down minimum but often times we are capped at a loan to value of 80% loan to value based on the factors listed above.
  • uses future value to determine the loan to value
  • allows for building from the dirt up and also for remodels over the $424,100 loan amount.
  • construction funds are set up as a construction line with our partner construction bank to be drawn upon by builder for the project
  • one time close construction loan.  The loan is underwritten by both our underwriters for the end loan up front and the construction bank for the construction line.  Once the construction is complete, the loan is modified from a construction loan into the permanent financing end loan.  The avoids the need of having TWO closings as many banks utitlize for construction loans that cause borrowers to have TWO sets of closing costs.

The information above are basic guidelines for the programs available but are always subject to change.  Every loan is unique and has it's own varaiables that influence loan structures and exceptions.  When borrowers are getting pre-approved with us, they are getting pre-approved for all programs we have available to them.  We go over the above program options to see which potential renovation product is the best fit should they decide to go down the renovation path.

Please don't hesitate to reach out to us with any questions you may have when looking at a potential renovation purchase, new construction home or remodeling your home.

Ben Coulter
612-384-7818  |  ben.coulter@supremelending.com