Real Estate Agents

Everything Real Estate Agents need to know about renovation loans

How renovation loans can help you help more families

Problem #1

You have pre-approved buyers struggling to find a home in their price range.

Solution

Pitch the idea of buying something in a cheaper price range that needs work and financing the renovation costs into their new mortgage.

Problem #2

You have deals falling through at home inspection or appraisal.

Solution

Instead of walking away if/when sellers are unwilling to make repairs, go back to the buyers and present the option of financing repair costs into their new mortgage.

Problem #3

You have distressed listings.

Solution

Even seasoned agents make the mistake of listing these properties for “cash only” buyers. Instead, promote the availability of renovation or fixer-upper financing.

Affordability Is a BIG Concern

Watch This Webinar on the Value of Using Renovation Loans to SELL MORE HOMES

Renovation loans are a perfect niche to help solve the low inventory issues we are now facing. With rates on the rise, this type of financing can become a practical tool to help more families purchase homes on a budget.

Any Questions?

I'm an expert at renovation mortgage loans, so reach out with any questions!

Important Renovation Loan Information for Real Estate Agents

Point Out Obvious Repairs: During showings, it may be helpful to point out any health, safety, or structural concerns. They will be required repairs. Want an overview of HUD’s Minimum Property Requirements? Contact me for more information.

Be Mindful of the Flipping Rule: If the buyer is using FHA financing and it is known that the seller has owned the property for less than 180 days, advise the mortgage loan officer. HUD’s restrictions on property flipping may apply.

Indicate the Type of Financing: For FHA loans, indicate the financing will be FHA 203(k). For all other loan types, simply indicate the financing will be conventional, USDA, or VA.

Include Contract Contingency: When you get ready to write the offer, identify the type of financing the borrower is using (i.e., FHA 203(k), conventional, USDA, VA) and include the following contingency: “Contract contingent upon mortgage approval and the buyer’s acceptance of any repairs required by the lender and/or [select one, as appropriate: Fannie Mae®/Freddie Mac®/HUD/USDA/VA].” The offer should be written for the purchase price based on the as-is value of the property, and not the purchase price plus renovation costs.

Allow 60 Days for Closing: Renovation loans take slightly longer than traditional loans to close. Allow some additional time for home buyers to find a contractor and get a bid.

Allow Access To Property: The seller and listing agent should prepare for additional requests to view the property from inspectors, contractors, Consultants, structural engineers, architects, etc.

Enjoy Loan Closing! Renovation loans go to settlement like traditional loans. There is only one closing and the real estate agents receive their commissions at loan closing.

RELAX. Or go find that next deal. Renovations take place after loan closing and I’ve got you covered! The renovation project commences after loan closing and draws paid to contractors are managed by Diamond Residential Mortgage Corporation and/or our vendor.