Renovation Lending for Contractors

Fixer-uppers are more popular than ever. And thanks to Cardinal Financial’s renovation loan products, financing the work you put into them is more convenient than ever. Based on the after-improved value of the home, renovation loans give your customers the ability to finance their mortgage and renovation costs in one convenient loan.

The Cardinal Difference

From major structural updates to minor repairs, we’re here to help get your projects financed with minimal hassle.

You’ll be supported by our in-house Home Renovation Team, who’s been trained to assist your customers during each stage of the renovation project.

We offer rehab loans from the FHA and Fannie Mae, each with built-in renovation funding. These loans allow your customers to use the after-improved value of the home to expand the amount of funds available to finance your work.

Your payments are approved and the funds are held in escrow by our Home Renovation Team. They’ll issue payments in a series of draws as work is completed.

Our Renovation Process

Qualification

Step 1: Qualification

Got docs?

Your customers will submit documentation to see if they qualify for renovation financing.

Validation

Step 2: Validation

Our turn.

We’ll review and validate your licensing history and insurance credentials.

Approval

Step 3: Project Approval

Almost done.

Next, we’ll review your project details to make sure they meet our loan standards.

Closing

Step 4: Closing and LIP Account Setup

Get funded.

Once your customer’s renovation loan is approved, it’s time to set up a closing date with us and your customer to sign the final documents and pay any closing costs due. The renovation funds will be held in a Loan in Process (LIP) account. This is the account you and your customer will draw funds from throughout the renovation.

Completion

Step 5: Draw Disbursements and Project Completion

Let’s wrap it up.

During construction, you or the HUD consultant will request to draw funds from the loan as needed for materials, labor, and other related costs. Renovations must be completed within 6-12 months of the closing date.

Project Types

Replacement of electrical, HVAC, and plumbing systems
Adding or expanding bedrooms and bathrooms
Functional improvements such as remodeling a kitchen or bathroom
Increasing home energy efficiency
Improving accessibility
Luxury projects and additions, such as a swimming pool
Renovating a second home or investment property

Products with Purpose

Loan parameters can change – for the most accurate details of all loan products, please speak with your Cardinal Financial loan originator for details.

	FHA 203(k) Standard	FHA 203(k) Limited	Freddie Mac CHOICRenovation / FNMA Homestyle	Freddie Mac CHOICEReno eXPress
Eligible Renovation Projects	Include, but not limited to: Improvements permanently affixed to property or land, Eliminating health and safety hazards that would violate HUD’s Minimum Property Requirements, Structural alterations, repairs and additions to structure, Repair of existing swimming pool, Installing or repairing exterior decks, patios, and porches, Increase energy efficiency, Protect against disasters, Repair disaster damage	Include, but not limited to: Minor remodeling and non-structural repairs, Improvements permanently affixed to property or land, Eliminating health and safety hazards that would violate HUD’s Minimum Property Requirements, Repair of existing swimming pool, Installing or repairing exterior decks, patios, and porches, Increase energy efficiency, Protect against disasters, Repair disaster damage	Improvements permanently affixed to property or land, Complete final work on a newly built home at least 90% complete, Construct outdoor buildings and structures (i.e., garages, swimming pools), Construct accessory dwelling unit for a 1-unit dwelling primary residence, Increase energy efficiency, Protect against disasters, Repair disaster damage	Program used for minor remodeling and smaller projects Improvements permanently affixed to property or land, Complete final work on a newly built home at least 90% complete, Construct outdoor buildings and structures (i.e., garages, swimming pools), Construct accessory dwelling unit for a 1-unit dwelling primary residence, Increase energy efficiency, Protect against disasters, Repair disaster damage
Minimum Credit Score	620	620	580 620 required on Investment > 80% LTV	580 620 required on Investment > 80% LTV
Eligible Property	1- to 4-unit primary residence Planned unit development (PUD) FHA-approved condominium unit or site condo unit Manufactured housing HUD real estate-owned (REO)	1- to 4-unit primary residence Planned unit development (PUD) FHA-approved condominium unit or site condo unit Manufactured housing HUD real estate-owned (REO)	1- to 4-unit primary residence 1-unit second home 1-unit investment property Manufactured housing 1-unit in an eligible PUD or condominium	1- to 4-unit primary residence 1-unit second home 1-unit investment property Manufactured housing 1-unit in an eligible PUD or condominium
Types of Financing	Purchase Rate/Term Refi	Purchase Rate/Term Refi	Purchase Rate/Term Refi	Purchase Rate/Term Refi
Occupancy Types	Primary	Primary	Primary Second Home Investment	Primary Second Home Investment
Max LTV/CLTV	96.5% purchase 97.75% refinance	96.5% purchase 97.75% refinance	Primary Residence – 97% Home Possible – 97% HomeOne – 95% 1-unit – 95% manufactured housing – 95% 1-unit super conforming – 85% 2-unit – 80% 3-4 unit Second Home – 90% 1-unit – 85% manufactured housing – 85% super conforming Investment – 85% 1-unit purchase – 80% 1-unit refinance	Primary Residence – 97% Home Possible – 97% HomeOne – 95% 1-unit – 95% manufactured housing – 95% 1-unit super conforming – 85% 2-unit – 80% 3-4 unit Second Home – 90% 1-unit – 85% manufactured housing – 85% super conforming Investment – 85% 1-unit purchase – 80% 1-unit refinance
	FHA 203(k) Standard	FHA 203(k) Limited	Freddie Mac CHOICERenovation	Freddie Mac CHOICEReno eXPress

Creating a Bid

When it comes to renovation, details matter. That’s why we made it easy to place a detailed bid with our free templates.

PDF Spreadsheet

FAQs

You asked, we answered.

What if our customers want extra work done?

The approved renovation escrow account is based on the original bid. For additional work, you’d need to submit a change order for non-listed materials or labor. If this change order is not approved by Cardinal, it would be your customer’s responsibility to fund the additional work.

Can I get money before the work starts?

Cardinal does allow funds to be released upfront for material costs on all products with customer permission. In most cases, the remaining funds will be released after work items are complete and inspected.

What’s a holdback?

As each draw is released, 10% of the funds requested are held back until all the renovations are complete and a final inspection is done. Once all parties agree on satisfactory work and no liens have been filed against the property, all holdbacks are released.

How does the contingency reserve work?

A contingency reserve is either collected or financed to pay for unforeseen repairs. If none occur, the reserve funds can either be used to execute additional repairs (if approved by our draw disbursement team) or applied to the principal balance of the loan. If your customer puts up the contingency in cash, it can be directly refunded.

Complete the form and one of our reno lending specialists will contact you.

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Ready to Renovate?

Get in touch today to explore all the ways we can help streamline your next project.