Renovation loans get pandemic boost as homeowners want home offices
Vexed by work-from-home arrangements owing to the COVID-19 pandemic, homeowners are taking the long view and rethinking floor plans. The reality is, home offices are no longer a luxury.
In the initial three weeks of public health lockdowns in March, according to Gallup, the percentage of employed Americans working from home doubled to 62%. Of these workers, three in five said they’d prefer to work from home when restrictions are lifted. Homeowners are serious about dedicating room for work.
There’s a mainstay in mortgage finance poised to help in working from home. The Federal Housing Administration’s 203(k) rehabilitation mortgage insurance program is designed for borrowers to renovate when they purchase or refinance.
For over 40 years with Section 203(k) of the National Housing Act, FHA has been protecting lenders with fully-insured mortgage loans even as renovations are underway. In turn, the program opens access to much-needed renovation capital for borrowers.
As with any program, there are parameters, but this one isn’t confined to repairs. It allows for actual home improvements to complement contemporary lifestyles. And these days, that means renovation choices brought on by the coronavirus and the remote economy.
“Since many people work from home – and plan to be home more now since COVID – I’m seeing both purchases and refinances with homebuyers and homeowners, who are planning projects to add more square footage to the existing structure of homes in their desired location, but not enough room to convert into space,” said Patrice Watkins, vice president of Renovation Lending at Guaranteed Rate.