I have a house under contract with a walk out basement that I want to make into a studio apartment for a house hack. Does anyone know of anyway that I can finance the remodel using either a conventional or FHA mortgage?
Look into a 3.5% down, 203K loan. You can wrap the renovation cost into your mortgage as long as you are willing to live in the residence for 12 months. Good luck!
203K sounds good I like that it is only 3.5% down. Can it be used on a home that is not a fixer upper? The home I have under contract is in good shape I just need to remodel the basement so that someone could live down there.
Yes, look into the 'Streamline' 203K. It's for smaller projects like renovating a basement. You are able to wrap up to $35K in construction cost into the mortgage. This is an FHA product however, so consider that you have to pay MPI for the life of the loan. You can refinance after 12 month (I think) into a conventional loan if you want to remove the MPI payment every month. You may also have the ability to pull some of the equity out of the home based on the increased value (assuming the renovation does indeed increase the value) in order to continue improving the property.
@Brandon Hunsaker Before you go into this, make sure that you can legally convert the SFH into a duplex, because that's what you are proposing. If it all makes sense, then you have two options - FHA 203(k) and Fannie HomeStyle Renovation. Both are available for owner occupied rehab properties. Fannie is the better version as it's easier to work with and will allow you to do things that FHA will not.
Thank you @Upen Patel that is very helpful information!