Jumbo Renovation Loans: A ReviewÂ
When the price of a home or the cost of repairing it exceeds typical loan limits, a jumbo renovation loan may offer a solution. Whether you’re purchasing or refinancing a rehab property, this program allows you to borrow more. Get the details below.
What Are Jumbo Renovation Loans?
Higher loan limits
Jumbo renovation loans offer amounts that exceed Federal Housing Finance Agency (FHFA) limits to qualified borrowers.
Flexible renovation options
Can be used for various types of renovations, from cosmetic updates to major structural changes.
No need for multiple loans
Since jumbo renovation loans can be used to cover both purchasing or refinancing and the cost of making upgrades, borrowers only have to pay back one mortgage.
What Can a Jumbo Renovation Loan Be Used For?
Multi-family properties
If you are buying or refinancing a multi-family property that also needs repairs, this program offers the flexibility to do both within a single jumbo mortgage.
Luxury estates
Jumbo renovation loans are also ideal for luxury renovations like installing an in-ground pool, adding a home theater, or integrating extensive smart home features.
Historic homes
A jumbo renovation loan can be used to restore a historic home while preserving its original features and ensuring the work meets local preservation guidelines.
Pros
- Larger loan amounts
- Competitive terms for qualified borrowers
- Covers a wide range of renovation projects
- Eliminates the need for multiple loans
Cons
- Must have a strong credit profile
- Generally requires a large down payment
- May have substantial closing costs
Talk to our mortgage experts today about finding the right loan for you.
Alternatives Jumbo Renovation Loan
- Backed by the Federal Housing Administration (FHA)
- Can be used for fixer-uppers
- Offers a streamlined version for less extensive renovations
- Requires upfront and annual mortgage insurance premiums (MIPs)
- One loan for purchase/refinance and renovations
- Based on the home’s after-renovation value
- Can be used for almost any type of renovation
- Private mortgage insurance (PMI) may be required Â
- Based on your existing home equity
- Replaces your old loan with a new one for more than you owe
- Gives you the difference in cash
- Can be used on anything, not just renovations Â
How Do I Know If a Jumbo Renovation Loan Is Right for Me?
You want to personalize a luxury home
A jumbo renovation loan is ideal for making customizations to a luxury home you're buying. This program allows you to finance the property and upgrades like gourmet kitchens and high-end finishes.
You're buying a fixer-upper in an upscale neighborhood
If you're buying a fixer-upper in an upscale market, this program offers the flexibility to complete extensive updates and high-cost repairs to bring the home up to par with others in the neighborhood.
Your planned renovations exceed conforming loan limits
If the home you want to buy or refinance needs a major overhaul, a jumbo renovation loan lets you borrow more than the conforming loan limits to cover the entire project.Â
When Is the Best Time to Use a Jumbo Renovation Loan?
The best time to use a jumbo renovation loan is when you have the opportunity to buy your dream home, but it needs work to make it livable again. It’s also ideal when you want to refinance a high-value home to make accessibility upgrades during retirement, or when you’re looking to invest in a luxury property and want to add custom features.
With this program, you can address structural repairs, cosmetic upgrades, and high-end renovations all within the same loan. This simplifies the process and gives you more flexibility to make the changes you want without the hassle of multiple mortgages.
Get In Touch With A Loan Officer Today
FAQ
How much can I borrow with a jumbo renovation loan?
What documents do I need to provide?Â
Are there restrictions on the type of renovations I can make?
- Non-value-adding renovations
- Temporary changes without long-term value
- Luxury improvements that don't fit the home
- Over-personalized updates that make the home less marketable
- Changes that make the home unsafe to live in
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