Work With A Renovation Loan Professional

First Community Mortgage's Perry Farella will help guide you through the renovation loan process.

Renovate Your Home

We'll help you buy and renovate your home or investment property.

One Loan, All Renovation Costs

Put All The Costs Into One Mortgage Loan

Have A Renovated Property?

Allow us to refinance your loan as interest rates decrease.

Perry Farella (Nmls#755943)

An Experienced Loan Officer In Renovation Loans.

Home Mortgage Calculator

These calculations are tools for learning more about the mortgage process and are for estimation purposes only. Payment shown does not include taxes, insurance, or mortgage insurance (if applicable). This does not constitute an offer or approval of credit. Contact a Perry Farella home loan officer for actual estimates.

The calculator is only providing the monthly payment consisting of principal and interest. It is not including any taxes, homeownersinsurance, or mortgage insurance. All borrower situations are different. Please consult your loan originator for more detailed information, including current rates and the applicable Annual Percentage Rate (APR) for your loan.

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What Our Customers Say

Jillian LemeryJillian Lemery
19:43 24 Mar 22
Although I was unable to work with Perry on my project, the information on his website was great and his emails were extremely quick with clear answers.
Manny ArnoldManny Arnold
19:47 14 Jun 20
I met Mr.Farella on Bigger Pockets, i am 25yrs old and deployed overseas, he consistently gave me real estate advice from across the world whenever i asked, out of the kindness of his own heart. he received nothing from helping me and no one else saw it. From behind the scene Mr. Farella is providing value to others even when others arent watching. He continues to give me advice and i will recommend him to anyone, Thank you Sir.
18:33 02 Dec 17
Perry was amazing to work with! There were a lot of moving parts and Perry handled everything with ease and it was cleared to close much sooner than we anticipated! I absolutely recommend Perry for your lending needs!
Benin BryantBenin Bryant
16:02 18 Nov 17
Perry is very experienced, thorough, and patient enough to explain things down to the smallest detail. It was my first time acquiring a mortgage and Perry was able to help me navigate through all of the obstacles. I consider myself lucky to have had Perry as my loan officer and would highly recommend him.
dominique mitchelldominique mitchell
13:41 30 Oct 17
““My family and I would like to thank you for all of your help during the loan process. Your hard work and dedication to our process was the best and which enabled us to get into our new home. You have help us learn so much as first time home buyer. I made the quick phone to you and without any doubt. You got me a pre approval in 1 hour. Word can't express how thankful I am of you. I appreciate you more then you. You blessed me and my family with 2 unit. Anyone I know who needs a home loan will be calling you first! I’ve already given your name to two other people that are looking to purchase and refinance. I know that you will take care of them as well as you did us. Thanks again, Karen!”The Jones Family.
Barbara BarkerBarbara Barker
20:19 19 Aug 16
I am a seasoned Real Estate Broker in the city of Chicago, I don't endorse anyone who I haven't personally used and I don't write reviews just to promote industry buddies, especially because my reputation is on the line. I've renovated 2 homes without a rehab loan and came to Perry Farella to help me secure a renovation loan for a bigger project (2 flat) in Logan Square. I've dealt with many mortgage brokers and know renovation lending can a be a difficult process. He made everything seem so simple and guided me through the whole process. He continues to go above and beyond after the closing making sure the project is going smoothly. There aren't many mortgage brokers in this city that can do a loan like this. Do yourself a favor and use Perry on your next renovation or regular home loan, he is simply the best!!! I really appreciate him dealing with me as a stress ball in the most professional and caring manner. Thank you Perry!!

Choice Renovation: Multi-Unit Purchase and Renovation Case Study

With Freddie Mac Choice Renovation financing the client was able to purchase and renovate a Chicago property.

Originally the property was a row house development of ten attached single family homes. The final result is now a 3 unit property. The two upper level apartments have 2 baths and 3 bedrooms, each approximately 1300 square feet. One apartment is in the basement level which has tall ceilings to allow dwelling space there with 2 bedrooms and 1 bath.

Post-Renovation Home Value: $770,000
Pre-Renovation Home Value: $325,000
Borrowed: $520,309 ($2949 per Month)
Loan Type: Freddie Mac CHOICE Renovation Conventional Loan

Read Renovation Story

Frequently Asked Questions

Can a renovation mortgage be used to buy and rehab an Investment property?

Yes. There are renovation loans for single family and two to four unit residential buildings that allow renovation funds too be added to the same mortgage. Also, any owner occupied one to four unit property can be the subject of a renovation loan.

Will a renovated property’s value after the renovation has been done be considered based on a general contractor’s specification of repairs document?

Yes. The Appraiser will determine the ARV of After Renovated Value based on a written contractor budget detailing the updates and repairs to be done during the renovation. The mortgage will then be underwritten with the ARV instead of current value or sale price. In this way a renovation can work to provide funds to restore most any property, no matter the condition, using its future, as finished value.

Is it possible to finance mortgage payments into a renovation loan to avoid having to pay a mortgage during the months the property is under renovation?

For those who will be owner occupiers, up to 6 months of full mortgage payment can be financed into the renovation loan. That includes principal and interest; property tax escrow; home insurance escrow and any required monthly mortgage insurance.

What are all the different types of renovation loans available?

Available renovation loan types include FHA 203k; Fannie Mae HomeStyle; Freddie Mac Choice Renovation and a VA Renovation loan for eligible Veterans and Active Duty military.

Is a reserve amount required for a renovation loan to cover unexpected costs not planned for?

Yes. Each renovation loan type requires at least a 10% Contingency Reserve based on the total renovation budget. In cases where properties do not have all utilities working, the Contingency Reserve automatically increases to 15%. In some cases, a Contingency Reserve can be 20% of the base renovation budget. If never fully used, the amount remaining is subtracted from the loan principal upon completion, reduces the total mortgage size accordingly.

How are renovation funds distributed?

Each renovation loan type has specific regulations regarding how renovation funds are accessed by a contractor. FHA 203k allows no withdrawal of funds at closing. Instead, funds are sent to the contractor in arrears to pay for completed work in phases, typically no more than five. With HomeStyle or Choice Renovation, a contractor can be given up to 30% of the renovation funds at loan closing with First Community Mortgage. The VA Renovation loan allows up to 30% of funds to be given at closing.

Is a renovation loan one loan with purchase funds and one loan for renovation funds?

No. All the renovation loan types are one single loan with renovation funds added into the single loan. Terms can be for 30 years, with a fixed interest and amortizing payments.

Can I select any general contractor or set of contractors for a renovation?

A borrower may select any licensed contractor, but each contractor must be validated to be sure a license is current, insurance coverage is current and any required Workmen’s Comp policy is in place. Additionally, a background check is done to learn of any client complaints, litigation, etc.

Is it possible to add more square footage and totally rebuild a property with a renovation loan?

Yes. Adding to the house either out or up is frequently done within whatever the local building department will issue building Permits to do. Clients have added second floors to ranches and bungalows for example. Other clients have salvaged only a foundation and part of the support walls to construct a brand new home within the shell of an old one. Other clients have gut rehabbed two to four unit’s apartment buildings including adding basement square footage to an apartment above, etc.

Can items like kitchen appliances, HVAC, sidewalks, outdoor kitchens, fencing, separate garage, and landscaping be included in the renovation loan?

Yes. The renovation loan types will allow most of these items to be included. The exception is FHA 203k does not allow luxury items defined as outdoor kitchens jetted bathtubs, steam showers, saunas, basketball courts, tennis courts, new swimming pools or other similar luxury items.

Recognition And Awards