Renovation Lending for Real Estate Agents

Step 1: Renovation Qualification

Got docs?

First things first: Your clients need to submit documentation to qualify for renovation financing. This process is very similar to that of traditional financing.

Step 2: Contractor Selection

Build your team.

Next, your clients will shop for and select a home improvement professional to execute their renovations. Once the contractor is selected, your client will submit their contact info to Cardinal Financial.

Step 3: Contractor Validation

Our turn.

Once received, we’ll review and validate their chosen contractor’s qualifications. This includes checking their personal and business credit reports, building history, and previous project references. Renovation loans may also require a HUD consultant.

Step 4: Final Project Approval

Almost done.

Next, we’ll review all of the proposed home renovation details to make sure they meet our loan standards. This is also where we ensure your client has allocated enough funds in the proposed budget to complete the project and submit their final underwriting approval.

Step 5: Closing and LIP Account Setup

See you at closing.

Once your client’s renovation loan is approved, it’s time to set up a closing date with us and your client 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 your client and their contractor will draw funds from throughout the renovation. The monthly principal, interests, taxes, insurance, and association dues are always made right after closing.

Step 6: Draw Disbursements and Project Completion

Let’s wrap it up.

During construction, the chosen contractor or 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.