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A few LOs I've spoken with in recent weeks have told me they've seen an increase in inquiries for renovation loans, partly because the value of their clients' homes has risen and it makes sense financially to do a cash-out. The challenge? Finding contractors to take on the work and complete it within a reasonable time frame. And of course, the materials costs, which are pretty outrageous these days.
On a personal note, my wife and I have been pursuing a Fannie Mae Homestyle Purchase-Reno loan in one of the country's hottest housing markets, the Hudson Valley (where real estate agents have waiting lists for new clients). We even found a few gut reno fixer-uppers that worked within our budget. But we haven't been able to find a contractor who is both qualified to take on a job of that magnitude, and available to do that work within nine months. The loan can't be originated without a contractor who's ready to go. So, for now, it's back to the drawing board.
LOs, I'd love to hear what you've experienced of late. Are more of your clients seeking out renovation loans? What are the pros and cons of the various products? Any particular challenges in underwriting that you've come across?
As always, please reach out to me at jkleimann@housingwire.com.
Managing Editor, HousingWire
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