Renovation Loans

TEG’s Renovation Loan may only be used with a property that is intended as an owner-occupied primary residence or second home.

Funds may be released directly to the contractor, sub-contractor, or supply vendor as directed on the draw request.

Yes. Even though you may pay your contractor, if your contractor does not pay the subcontractors or materials supplier, they can file a mechanics lien against your property.

No. A qualified general contractor is required to oversee the project.

Most renovation loans have a 10-15% contingency reserve. Those funds may be accessed with an approved change order and draw request. The Borrower is responsible for paying the overages that exceed the contingency allowance.

Any remaining financed contingency will be applied to your mortgage balance as a principal payment after final draw is complete.

We recommend waiting until financing is secured before starting your project. In the event construction has started prior to application, please discuss this with your loan officer so that they can provide the appropriate direction.

No. The home may be purchased simultaneously with the closing of the Renovation Loan.

You may request an extension for your project to allow time to complete the renovation. Failure to complete renovations within the allotted time frame without an approved lender extension would violate your mortgage terms.