Once construction is complete and a certificate of occupancy is issued, the loan converts into a standard mortgage with fixed monthly payments including both principal and interest during the chosen term—typically 15, 20, or 30 years.
Renovation (Home Improvement) Loans:
Although you can use a HELOC or a HELOAN to renovate or refurbish a home that you already own the amount of money available to you will be limited by the equity that you currently have in relationship to the appraised value. Pure "renovation loans" factor in the cost and value of the improvements assuming an increased value when completed. These 2 loan types are for primary owner-occupied residences only. Cannot be applied to a second home or an investement (Income producing) home. Fannie Mae HomeStyle® Renovation Mortgage The HomeStyle® Renovation mortgage allows you to finance both the purchase (or refinance) of a home and the cost of renovations with a single loan and one monthly payment. Eligible upgrades include: • Kitchen and bathroom remodels • Additions, such as in-law suites or basement apartments • Window replacements • HVAC system upgrades • Backup generators and battery storage systems • Smart home energy devices • Projects that improve natural disaster resiliency Loan Limits If you're purchasing a home that needs renovation: You can borrow up to 75% of the lesser of: • The purchase price plus renovation costs, or 56
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