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RENOVATION | FINANCING

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There are several financing options available for home owners, building owners and prospective buyers of properties in need of repair. Mullings Restoration & Development is an approved contractor with M&T Bank which handles the majority of the following financing options.

Financing Options

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SONYMA REMODEL NEW YORK

The Remodel New York Program provides competitive interest rate financing to qualified first time homebuyers for the purchase and renovation of homes in need of improvements or repairs. Under Remodel New York, SONYMA will finance both the purchase and the renovation of the home with one mortgage. Eligible renovations include repair or replacement of plumbing, electrical, and heating systems, structural repairs, additions, modernization of kitchens and bathrooms, new siding and windows and more. The renovation cost must be at minimum, the lower of $5,000 or 5% of the property's appraised value after the proposed repairs are made; and at maximum, 40% of the property's appraised value after the proposed repairs are made.

Eligible properties must be located in New York state and have a combined sales price and cost of renovations that does not exceed SONYMA's purchase price limits. The property may not be used for any business or commercial purpose and must be an existing one or two family home. Condominiums are eligible provided the condominium association permits the proposed renovations. (Manufactured housing and cooperatives are not eligible) Existing properties must be at least five years old as of the SONYMA loan application date and have been used only as a residence during the past five years. The property must be a maximum of 5 acres (exceptions can be made on a case by case basis) and must have a minimum of 500 square feet of living space (exceptions can be made on a case by case basis).

SONYMA OWN IT FIX IT

The SONYMA Own it, Fix it New York Home Mortgage is designed to provide streamlined mortgage financing to homebuyers for the purchase and repair of homes requiring no more than $25,000 in improvements. It is an enhancement that can be utilized with the below stated SONYMA programs for 1- and 2-family homes, PUDs and condominiums.

PRODUCT FEATURES: Available under SONYMA's Low Interest Rate Program and the Achieving the Dream Program (including Homes for Veterans Program)
• Financing up to the lower of 97% of the "after-improved" appraised value or the Purchase Price plus financeable repairs and allowable "soft" costs.
• Availability of down payment assistance. (higher of $3,000 or 3% of the home purchase price, not to exceed $15,000)
• Eligible Repairs up to the lower of 20% of the "after-improved" appraised value or $25,000.

ELIGIBLE RENOVATIONS: Includes repair or replacement of plumbing, electrical, and heating systems, additions, modernization of kitchens and bathrooms, new siding and windows, etc.

The renovation cost must be:
• At minimum, $1,000; and
• At maximum, the lower of 20% of the "after-improved" appraised value or $25,000.

ELIGIBLE PROPERTIES: Existing 1- and 2-family homes. PUDs and condominiums are eligible providing the homeowners association permits the proposed renovations. Manufactured homes and cooperatives are not eligible.

FHA 203K PROGRAM

HUD's Section 203(k) loan is one of many FHA programs that make mortgage credit available to borrowers when buying or refinancing a house that is in need of repair or modernization. Unlike conventional rehab programs, the 203k has the same relaxed credit and income qualifying and low down payment guidelines as other FHA loan programs. Loan amounts are based on completed value of your home. This program works great for those who may not otherwise qualify for conventional loans due to income, credit and/or down payment limitations. Similar to conventional renovation loans, the 203k offers a solution that helps borrowers by providing a single, long - term, fixed - or adjustable - rate loan that can cover both the acquisition and rehabilitation of a property. 203k loans save borrowers time and money.

With a FHA 203k loan you can finance up to six months of mortgage payments for owner-occupied properties to cover non-occupancy costs during construction. For example, if you have to spend six months renting an apartment while your home renovation takes place, you can roll those expenses into your loan amount.

FANNIE MAE HOMESTYLE PROGRAM

The HomeStyle® Renovation Mortgage also lets you buy a home and repair or improve it with just one loan. You can also use it as a refinancing tool to refinance an existing mortgage and borrow funds for the improvement or repairs to the home you currently own. Funds used for renovation under this program are capped at 50% of the completed value of the home.

With a HomeStyle® Renovation Mortgage you can finance up to six months of mortgage payments for owner-occupied properties to cover non-occupancy costs during construction. For example, if you have to spend six months renting an apartment while your home renovation takes place, you can roll those expenses into your loan amount. The types of repairs that are allowed are virtually unlimited but funds for renovation are capped at 50% of the completed value of the property.

HOME IMPROVEMENT PROGRAM

The Home Improvement Program (HIP) was developed in cooperation with private banks to provide loans to help small homeowners improve their properties. HIP loans of up to $20,000 are made to owner/occupants of one- to four-family homes located throughout the City. The City provides a grant which reduces the bank's interest rate to 2.5% or 5%, depending on the borrower's income.

SENIOR CITIZEN HOME ASSISTANCE PROGRAM

This program provides assistance in amounts up to $40,000 for a single-family house, and up to $30,000 per dwelling unit for 2-4 family houses to low- and moderate-income senior citizens age 60 or older who own and occupy one- to four-family homes. The loans vary from no-interest deferred loans to fully amortizing 3% interest loans.

ARTICLE 8A LOAN (Building Owners)

The Article 8A Loan Program provides rehabilitation loans to correct substandard or unsanitary conditions and to prolong the useful life of multiple dwellings in New York City. Rehabilitation is generally limited to the upgrading or replacement of major building systems with an emphasis on energy items. In general, loans cannot exceed the actual cost of rehabilitation. Loans are available in amounts of up to $35,000 per dwelling unit with no maximum per building, subject to the availability of funds. Loans may not be used to refinance existing debt on the property.

To qualify for a loan the borrower must own the property or have a contract to purchase. Individuals, partnerships and corporations are eligible. Preference will be given to buildings that have been maintained in accordance with City's Housing Maintenance Code or where the applicant furnishes assurance that all work required to comply with the code will be completed. Building condition and finances must demonstrate a need for funds, and owners must be unable to obtain financing privately. The interest rate is 3% with repayment in equal monthly installments and there is a prepayment surcharge within the first five years of the loan. The term of the loan may not exceed 30 years or the useful life of the improvements, whichever is less. There is a non-refundable application fee of $150.00 and a commitment fee equal to one (1%) of the loan amount payable at closing, plus a 1/2% legal fee. Non-profits are exempted from fees.

Loans are restricted to buildings occupied by tenants of low income. After rehabilitation, real property taxes may be eligible for abatement, and there will be no change in the rent regulation status (controlled, stabilized) of the units in the building. Where appropriate, rents may be adjusted to ensure repayment of debt service.

NEW PARTNERS PROGRAM (Building Owners)

The New Partners Program provides loans to owners to renovate small buildings where a portion of the building is vacant, and units are in need of rehabilitation. The Program is especially focused on buildings with existing commercial tenants and vacant residential space above. The loan features below market interest rates and terms of up to 30 years. Principals must have acceptable credit (no pending collection actions, foreclosures, etc.)

Eligible buildings include owner occupied with 1-4 units or buildings with existing commercial tenants and 1-20 vacant residential units. The building must be located in the Bronx, Brooklyn, Manhattan (north of East 96th Street and north of West 110th Street), Queens, or Staten Island and all taxes must be current at the time of closing.

PRESERVATION PARTICIPATION LOAN PROGRAM (Building Owners)

The Preservation Participation Loan Program (PLP) provides low-interest loans to private residential building owners for the moderate-to-gut rehabilitation of housing for low-to-moderate income households. City Capital funds, loaned at below-market interest with a thirty year term, and/or Federal HOME Grant funds are combined with bank financing to produce a below market interest rate loan. Funds may also be used for refinancing or acquisition in conjunction with rehabilitation. A small percentage of the loan may be for payment of property tax arrears.

SMALL BUILDING LOAN PROGRAM (Building Owners)

The Small Buildings Loan Program provides loans for the moderate-to-gut-rehabilitation of buildings containing between one and twenty units. Properties must be at least 50% residential and must be privately owned. City Capital funds, loaned at 1% interest with a thirty year term, and/or Federal HOME Grant funds are combined with bank financing to produce a below market interest rate loan.

REFINANCE YOUR MORTGAGE AND TAKE CASH OUT

If you have equity built up in your home, you can refinance your first mortgage for more than the current balance and take cash out to pay for your home renovation. Depending on how you structure your loan, you may even be able to keep your monthly mortgage payment the same by extending the term of the loan. Cash-out refinancing may also allow you to pay a lower interest rate than with a home equity loan or line of credit.

HOME EQUITY LOAN

A home equity loan works like a conventional first mortgage and can be a good option for paying for a home renovation. Using your home to secure the loan, you borrow a lump sum that you pay off for several years. The interest rate for a home equity loan typically remains fixed, but the interest rate is generally higher than that of a first mortgage. However, your closing costs are lower than with a first mortgage and you get all of the money you are borrowing at once.

HOME EQUITY LINE OF CREDIT

A home equity line of credit is another option for paying for a home renovation. This is a good option if you need to pay in stages. With a home equity line of credit a lender approves you to borrow up to a certain amount of money. You access the money as needed through a checkbook tied to your loan account. This can make it very easy to pay contractors or to make your purchases at a home improvement store. You owe interest only on what you have borrowed, and you can choose how much to pay each month.

PERSONAL LOAN OR LINE OF CREDIT

If your project is small, you may consider a personal loan or line of credit. Although they typically have lower fees, these loans are not secured against your home so they usually have higher interest rates than home equity loans or lines of credit. Also, whereas the other options are usually tax deductible, a personal loan or line of credit is not.

Once you have decided which type of financing works best for you, get preapproved from a lender so you know what you can afford. And make sure that your budget is at least ten percent less than your maximum loan amount. This gives you additional money to cover any unbudgeted costs during your home renovation.

COMPANY

Mullings Restoration & Development is a home improvement contractor that performs all interior renovations while specializing in kitchen and bathroom remodeling. Our services include project consultation, architectural design, plumbing, electrical and general construction.

CREDENTIALS

New Jersey Reg. # 13VH07426900
General Liability Insurance - $2M
Umbrella Insurance - $1M
Workers' Compensation
Disability

Renovation Facts

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