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Creative Mortgage Options Shared Appreciation and Other Alternatives

October 8, 2025 by Kay Monigold

Traditional mortgages are not the only way to finance a home. For buyers who want more flexibility or who face unique financial circumstances, creative mortgage options can provide alternative pathways to homeownership. These products are not always as well-known as standard fixed-rate loans, but they can be powerful tools when used wisely.

Shared Appreciation Mortgages Explained
A shared appreciation mortgage allows a lender or investor to provide a loan in exchange for a percentage of the future appreciation of the property. This often means lower monthly payments or reduced upfront costs for the borrower. When the home is sold, refinanced, or after a set period, the investor receives their share of the increase in value.

Benefits of Shared Appreciation
This option can make homeownership more affordable, especially in high-cost areas. It may be appealing to first-time buyers who want to reduce their monthly expenses or to homeowners who want to tap equity without taking on additional debt. By sharing future appreciation, the homeowner gets help today in exchange for giving up a portion of tomorrowís potential gains.

Risks to Consider
While shared appreciation reduces costs in the short term, it comes with trade-offs. If your home value increases significantly, you could end up giving away a large portion of your profit. This structure also adds complexity when it comes to selling or refinancing the property. Borrowers must carefully read the terms and fully understand how appreciation will be calculated.

Other Creative Mortgage Alternatives
In addition to shared appreciation, there are other options worth exploring. Community land trusts help lower purchase prices by separating the cost of the land from the home itself. Lease-to-own arrangements allow renters to build equity while preparing for traditional financing later. Seller financing is another alternative where the seller provides the loan directly, often with more flexible terms than a bank.

Creative mortgage options can be powerful tools, but they are not a one-size-fits-all solution. Before pursuing these paths, consider your financial goals, long-term plans, and how much control you want to retain over future profits.

Filed Under: Mortgage Tips Tagged With: Home Financing, Mortgage Options, Mortgage Tips

The Mortgage Options That Make It Possible to Buy a Fixer-Upper

August 19, 2025 by Kay Monigold

Buying a fixer-upper can be an exciting way to get into a desirable neighborhood at a lower price point, while also creating a home that reflects your style and needs. However, financing a property that needs significant repairs can be challenging if you are only looking at traditional mortgage products. The good news is there are several mortgage options designed specifically for buyers who are ready to take on a renovation project. Understanding these options can help you choose the right path to turn a home with potential into your dream property.

FHA 203(k) Rehabilitation Loan
The FHA 203(k) loan is a popular choice for buyers who want to purchase a fixer-upper and finance both the purchase price and the renovation costs in a single mortgage. Backed by the Federal Housing Administration, this program has more flexible credit requirements than many conventional loans. There are two types of 203(k) loans: the Limited 203(k) for smaller projects such as replacing flooring or appliances, and the Standard 203(k) for major renovations like structural repairs or room additions.

Fannie Mae HomeStyle Renovation Loan
The Fannie Mae HomeStyle Renovation loan allows you to borrow based on the  as-completed  value of the home, which is the estimated value after the renovations are finished. This loan can be used for a wide range of improvements, including luxury upgrades that FHA loans do not typically cover. Since it is a conventional loan, you may need a higher credit score than with FHA, but it offers competitive interest rates and can be used for primary residences, second homes, and investment properties.

Freddie Mac CHOICERenovation Loan
The Freddie Mac CHOICERenovation loan is another conventional option that can be used for repairs, upgrades, or even renovations to help a property withstand natural disasters. Like the HomeStyle loan, it is based on the post-renovation value of the property. It can also be paired with certain affordable lending programs to make the upfront costs more manageable.

VA Renovation Loan
For eligible veterans, service members, and certain surviving spouses, the VA Renovation Loan provides an opportunity to finance both the home purchase and repairs under the benefits of the VA loan program. This means no down payment in most cases and favorable terms. However, not all lenders offer this product, and the renovation work must be completed by VA-approved contractors.

Why Renovation Loans Make Sense
Renovation loans not only make it possible to buy a home that might otherwise be out of reach, they also give you the flexibility to create a space tailored to your vision. By rolling the cost of improvements into your mortgage, you avoid the need for multiple loans or high-interest credit cards to pay for repairs. In addition, the value of the home often increases after renovations are completed, which can improve your equity position more quickly.

If you have found a home with good bones and the right location but it needs some work, one of these renovation loan options could help you transform it into the home you have always wanted. The key is to work with a mortgage professional who understands the specific requirements of each program and can guide you toward the option that best fits your needs and budget.

Filed Under: Mortgage Tips Tagged With: Fixer-Upper, Mortgage Options, Renovation Loans

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Our Team

Kay MonigoldKay Monigold
Owner/Mortgage Broker/Residential Mortgage Loan Originator
NMLS#1086176

Steven LoweSteven P Lowe, Sr
Residential Mortgage Loan Originator
NMLS #1085638

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