Can’t find an affordable dream home? Renovation loans can turn fixer-uppers into fabulous.
During the second half of 2020, shortages of homes for sale – especially those priced under $300,000 – turned the Twin Cities real estate market into a buyers’ battleground, with low interest rates fanning the flames.
One local Realtor®, after receiving 22 offers in three days for a $339,000 home, remarked: “It’s a dogfight out there.” Another shopper with a $250,000 budget was outbid time after time, even after she added $30,000 to an offer. *
As 2021 begins, the housing inventory situation hasn’t improved for many Twin Cities neighborhoods – especially first-time buyers. However, some savvy buyers and agents have widened their options with renovation mortgages that provide additional funds for repairs and updates. These mortgages enable buyers to turn a fixer-upper or older property into an attractive, energy-efficient home.
Why a fixer-upper can be an ideal choice
- They’re priced below move-in ready homes, with some selling for surprisingly low prices.
- Buyers can have just what they wanted, instead of what the previous owner wanted.
- Buyers who love the history and features of Minnesota’s older Colonials, Prairie and Tudor styles are prime renovation borrowers.
- Sellers can bypass financing renovations or offering complex contingencies.
How renovation mortgages benefit buyers and sellers
Offered by the Federal Housing Administration (FHA) and Fannie Mae, renovation mortgages open up more purchasing options. Even if a home needs an additional bedroom or bathroom for a buyer’s family, these can be financed with renovation funds. Sellers of outdated, older properties often inherited from an older relative won’t need to carry out renovations or negotiate contingencies with buyers.
Results Mortgage offers two renovation mortgage products: FHA 203(k) and Fannie Mae’s HomeStyle® Renovation. While both offer mortgage and renovation funds, some buyers may be better-served by HomeStyle Renovation, especially if they’re planning non-essential or more expensive renovations.
Want to learn more? Contact Results Mortgage today for advice and answers to all your questions.