“This product sort of levels the playing field,” Margulies said. “I happen to live in New Jersey, and many of the communities are small towns. People want to live close to schools, they want to live close to downtown. This product allows them to buy something that’s close to town, the older properties. What folks are doing is they’re taking the product and utilizing it to upgrade those properties to standards that are above and beyond.”
Customers can get Fannie Mae HomeStyle loans, which allow for adding features like swimming pools, or FHA
203K loans, which are more for improving already-existing structures in the home.
“A real estate professional can sit down and say to you, ‘You know, I’ve got a beautiful home that’s right in the area you want to be in. we’re going to walk in there and get it for a very good price, and then I’m going to show you how through this product we’re going to be able to bring it up to what you want,’” Margulies said. “Maybe you want to add a pool, which you’d do with the HomeStyle. Maybe you’re going to add a room or redo all of the tile. They can walk in and say, ‘We can do it the way we want it.’ And it works.”
And the products are advantageous to home buyers as well; renovation loans allow home buyers to purchase homes at bargain prices – then increase those homes’ value as they renovate.
Neighborhoods get tired,” Margulies said. “…This product helps people to take these properties and get them at affordable prices, and it will increase the value – because an appraiser’s going to look at what you’ve done to increase the value. He’ll look at all-new bathrooms, kitchens – he’ll know if you’ve gone ahead and added things to the house.”
If you’re looking to boost your business, renovation loans could be a great way to go. These products can help real estate agents market otherwise difficult properties and home buyers make sure their new homes are exactly what they want, said David Margulies, executive vice president at American Financial Resources, the largest 203K lender in the country.