What's a Homepath Renovation Loan?

A Homepath Renovation loan is for foreclosed properties and it’s a conventional loan. Renovation loans are for properties that are damaged. Sometimes they allow the buyer to put a downpayment of only 3% of the sales price. Since this is considered a conventional loan, the ratios for debt to income need to be much lower than on FHA loans. FHA loans allow ratios to go as high as 55% while these conventional loans typically make the lenders stay around 45%. This means less buying power (lower sales price) for the buyer compared to an FHA loan.

In addition the rate is higher than the FHA loans since there is no monthly mortgage insurance and there is no appraisal report done either. Basically after submitting an offer, the buyer would never know if the appraised value is lower and if the buyer overpaid.



Amit Bhuta, ABR, CNS, e-PRO, Realtor-Associate
Coldwell Banker Residential Real Estate
Serving Miami-Dade and Broward County
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