AHFC provides renovation options covering three possible scenarios:
Who is Eligible?
Loan to Value (LTV)
LTV is based on the ‘as-completed” appraised value. Appraisal must address the planned renovation with estimated market value of the home after the renovations are completed.
Escrows for Completion
50% of the total loan amount, or $50, 000, whichever is LESS. A 10% contingency is required for cost overruns. Unused escrow funds are applied to the principal. The term of the escrow may not exceed 180 days. A final inspection is required.
Both an “as-is” and “as-complete” appraisal is required. Appraisals must clearly discuss the existing property, renovations proposed and include a discussion of materials used.
Renovations must comply with state laws regarding contractor licensing & minimum construction standards.
Any addition (new construction) to a property where the original construction began on or after 1/1/92 (energy) or 7/1/92 (inspections) is subject to thermal standards and mandatory inspections. Engineer’s evaluation may be required.
If an addition is being added to a home built prior to 1992, an engineer’s evaluation or home inspection may be required.
Additions must comply with lot setbacks and not create any encroachment(s).
To begin, contact an AHFC approved lender to help identify the right option for you.
Purchase Renovation Example
|Purchase Price:||$225, 000|
|“After” Appraisal:||$260, 000|
|Maximum loan: (95% of final appraised value)||$247, 000|
|Total of repairs: (cabinets, accessibility, flooring, etc.)||$ 27, 500|
|Contingency @ 10%:||$ +2, 750|
|Total:||$ 30, 250|
|Renovation Loan Amount: (95% of original purchase price)||$213, 750|
|Renovations & Contingency:||$+30, 250|
|Final Total:||$244, 000*|