You know that old Rodney Dangerfield joke that went “Small? Where I grew up, the house was so small even the mice were stoop-shouldered!” Well, that’s Ryan & Melissa’s story…
When Ryan and Melissa first came to me in the Summer of 2015, they were living in the tiniest home I’d ever heard of – 360 S.F. for kitchen, bath, bedroom, and all! And, with their first baby on the way, they were desperate to transform their home into a suitable nest to raise their soon-to-arrive baby daughter. Their home was along the CT coastline and I still remember Ryan sharing that he was actually disappointed when Storm Sandy didn’t wash his home away (so were his neighbors!).
But they had a vision of stripping the existing structure down to the framing and building a new 1,600 S.F. contemporary with 2-bedrooms and 1 bath, reserving space for a future 3rd bedroom and 2nd bath. I reviewed their plans with the builder and the HUD Plan Consultant and made the recommendation that we increase the budget to finish the bed and bath. That’s because “functional obsolescence,” the appraiser jargon for property conditions that render a home less valuable, was going to lower the end-value by far more than the cost to complete the extra work.
With excellent credit, a strong debt-to-income ratio, and sufficient assets to make the numbers work, I recommended the FannieMae HomeStyle Renovation loan as the most cost effective solution to achieving their goal. The HomeStyle loan offers a higher loan limit compared to FHA ($417,000 versus the lower FHA County limit of $305,900 in their area) plus there’s no Up-front Mortgage Insurance Premium. In addition, they qualified for Lender-Paid Mortgage Insurance which produces the lowest possible monthly payment.
I’m in the business of helping people realize their dreams. If you have a vision of transforming a tar-paper shack into your own Taj Mahal, please contact me to learn more about my full suite of renovation loan products.