I've decided that I'm going to focus on buying a home with some type of renovation loan. The property I'm looking at is in a great area, and liveable as is but needs some cosmetic things for sure. For example hardwood floors need refinished, the place needs paint, and the yard is pretty rough. Beyond that, there are a couple of big ticket items like the roof which may need replaced, and the wiring because I'm not sure if it's got aluminum wiring or not.
Ideally, I'm looking at doing a renovation loan because I don't have the liquid cash to do renovations unless I drain most of my savings. Also, it may be fairly easy for me to do because my dad is a licensed full time general contractor and has been for 20+ years, so I'll feel a bit better trusting him with the project (and getting my hands dirty as well) rather than trusting some slimy third party contractor.
This would be my first house which is why I'm considering purchasing a bit more of a fixer upper so I have the chance to build some equity and gain some knowledge in the process. Just trying to figure out what option is best for me. The 203K seems more restrictive than Home Style and Home Ready but I'm not sure if there are any other downsides in the non-FHA options that I am not seeing. Ideally looking to keep the house as my primary residence for at least a few years, then either use as a rental or sell depending on market conditions. Home would be located in Florida, for anyone who may be able to connect me to a solid lender that has experience with these and can walk me through all the options. Let me know y'all's thoughts. Thanks so much!
203k has limits on what you can fix - sounds like your list is fine. 203k you are stuck with 1.75 mortgage insurance until the value goes up enough to refinance to conventional- thats the big $ difference. 203k allows lower 580 FICO score and I can go to 49% back end ratio if you have combo of 12 months reserve money plus FICO 660. 203k 3.5 % down. You agree to live there 12 months.
Homestyle is a bit "cheaper" but 10% down - conventional FICO and back end ratio holds at 43. You can put 20% down and avoid the mortgage insurance premium (mortgage insurance for conventional has MANY choices: lender paid with higher rate/ split/ monthly.... and so forth but it is much cheaper than FHA 1.75)
Home Ready may have income limits and county limits FICO 620 minimum
Differences are: cost, can you qualify, how the individual regulates your inspections which is lender specific