Renovation Loan Options

[Casandra Espenschied]

Hi BP Friends,

My question is, what are our renovation loan options? What has worked for you?

A little background:

My husband and I are looking for our first house-hack on the island of Oahu. The market moves quick here and many of the homes are outfitted to be multigenerational, which leads to great potential for turning a large home into multiple units.

We are both active duty military and asked both our lender and a mentor of ours about the VA Reno loan, but were advised that there isn't very much flexibility if we were to take that path.

Looking forward to your input and any additional advice you may have,

Casandra

[Paul Welden]

Your most common renovation loan options are:

• FHA 203k
• Fannie Mae Homestyle
• Freddie Mac ChoiceRenovation
• VA Renovation (VA temporarily suspended this in March 2020 until further notice)

When house hacking, a good tip to remember if you want to sell it within a few years is to occupy the property as your primary residence for 2 years during any 5yr period which should qualify you to get the profits TAX FREE from the sale (check with your CPA & IRS for tax advice). Of course you could probably 1031 it if it's an investment to defer your taxes.