Construction Loans

Mary Beth H: Hi, this Mary Beth Harrison with Dallas Native Voice, and I’m sitting here With Jason Browning with Certainty Home Loans, and I want to talk to you about something that comes up with my buyers. They find a house that they love, but it needs all kinds of work, and is there a loan for that? How do they go about doing that?


Jason Browning: Absolutely, that’s a great question Mary Beth. So, what we’re seeing a lot of the time right now is someone will find a home in the best neighborhood that they’re looking for, or just a good footprint, and they just don’t really like the inside of the house, or the color of the carpet, or what have you.


  There are some renovation loans out there that have become way easier to complete than they have in the past. Basically you just get a general contractor involved, you get an estimate.


Mary Beth H: So they can’t do the work themselves?


Jason Browning: Right, you want to step away from that.


Mary Beth H: All right.


Jason Browning: And you have inspections and things of that nature, that’s a very good question.


Mary Beth H: Okay, all right.


Jason Browning: But for example, let’s say you have a $150,000 house, and then want to do $50,000 of improvements, well they get that general contractors bid, send it to the appraiser, one appraisal. That appraisal should come in at the $200,000, so the $150,000 plus the $50,000, and then their down payments start from there, they’ve financed in all the repairs.


Mary Beth H: Got you, so the house has to appraise for the approved value.


Jason Browning: Yes ma’am.


Mary Beth H: All right, well that makes sense. And that opens up such a wealth of opportunity for buyers with inventory as low as it is right now, they maybe can make do with a house that needed a little more work than what they wanted, but roll it into the loan. And it’s the same interest rate?


Jason Browning: The interest rate could be about 1/8 to 1/4 higher.


Mary Beth H: Okay.


Jason Browning: And there’s a couple of small extra fees as far as inspection fees and things like that. But all that can be financed in. And one of the things I wanted to mention as well, I mean you have six months to finish the improvements.


Mary Beth H: Oh, that’s really good to know.


Jason Browning: But the good thing about this type of a loan is you’re going to start making payments, so you get to skip a month and then you have your normal payments. So you can actually finance in the payments that you would miss, so you’re not making a payment on something you’re not living in.


Mary Beth H: Okay.


Jason Browning: So it makes it definitely easier to manage.


Mary Beth H: So you can live somewhere temporarily and pay for that, while this one’s getting done. And then start those payments and move on down the road.


Jason Browning: That’s correct.


Mary Beth H: That sounds like a really great loan opportunity for many buyers out there now. So I’m glad to know that’s available.


Jason Browning: Yeah, they’re becoming more and more popular, we have a full team that’s dedicated to getting those things done. And it’s a very simple process, still closed within 30 days so you’re not really losing out on a contract bid because you’re taking longer to close or something along those lines.


Mary Beth H: Good point.


Jason Browning: You still can close in a fair amount of time.


Mary Beth H: So, can you do the same loan with an FHA loan?


Jason Browning: Yes, that’s probably the most popular is the FHA.


Mary Beth H: Okay.


Jason Browning: They call it a 203K, and there’s a couple of versions there based on what you’re trying to do as far as dollar amount of improvements. And you can do knocking down of walls and things of that nature. But then they also have a conventional called the home style renovation, which is one where you can do some luxury items, like a pool, or an outdoor grill, or something. So you can really touch it up nicely.


Mary Beth H: Make the home you’re own.


Jason Browning: Absolutely.


Mary Beth H: All right, well thanks for that information. And as always, you can find us on all social media channels as well as our website at And thanks for listening.





Information Courtesy of Dallas Native 


Leave a Reply