Purchase plus improvements

Posted By on Mar 31, 2014 | 0 comments


PurchasePlusImprovements.htm_txt_PPCMHCIf you are interested in a home, and want to include the cost of improvements or renovations in their financing, the Purchase Plus Improvement Mortgage is a great option.

For example, Improvements such as a new kitchen or bathroom.  This program is for purchase transactions where there will be improvements to the property that increase the market value, but where the costs of improvements are limited to the lesser of:

10% of the Improved Value, or

$40,000

If this cap is exceeded, then you will have to proceed with construction financing.

For example, the purchase price is $400,000, and the cost of the new kitchen is $40,000.  Upon appraisal, the as-improved value is $440,000.  Hence, we can lend on the as-improved value of $440,000, with a minimum 5% down payment, i.e. $22,000.

Important points to note:

–         An appraisal is required for the as-improved value

–         For purchase transactions, you can get 95% of the as-improved value for 1 – 2 units and up to 90% of the as-improved value for 3 – 4 units

–         Down payment requirements are based on the as-improved value.

 

Fill in the form below to see if you qualify