Finance · Renovation Loan Programs

Buy the Home. Finance the Work. One Loan.

A renovation loan lets you purchase a home and finance the improvements in a single mortgage, so you do not need cash reserves for repairs or a separate loan after closing.

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Loan for buy and renovate

Closing, not two

After value

Appraisal basis

What it is

Stop passing on homes that need a little work.

Most buyers skip homes that need repairs because they cannot see how to pay for both the purchase and the work. A renovation loan wraps both into one mortgage, based on the home after improved value.

That means you could buy a home priced below market, finance the repairs, and build equity as the work is completed, with one application, one closing, and one monthly payment. It also works for current homeowners through a renovation refinance.

Why buyers use renovation loans

One loan, one closing

No purchase loan followed by a separate home equity or personal loan. It is a single application, approval, and monthly payment.

Borrow on future value

The loan is based on the home after renovation appraised value, so you may be able to finance more than the current price to cover the work.

Turn a fixer into home

Buy below market because a home needs work, then finance improvements, often at a lower total cost than a comparable move in ready home.

Works for owners too

Already own your home? A renovation refinance rolls improvement costs into a new mortgage based on the improved value, an alternative to a HELOC.

Renovation loan programs

Program figures are general guidelines and vary by lender and scenario.
Program	Min. down	Scope	Best for
FHA 203(k) Standard	3.5%	Structural and cosmetic ($5k min)	Major rehabs
FHA 203(k) Limited	3.5%	Non structural, up to $35k	Kitchens, baths, flooring
Fannie Mae HomeStyle	3% (primary)	Up to 75% of after value	Luxury upgrades, investment
Renovation Refinance	Varies	Based on after improved value	Current homeowners

A renovation loan may fit if you are…

Buying a home that needs work before it is move in ready
Interested in a fixer upper to build equity
A current homeowner who wants to renovate without a HELOC
Shopping in a competitive market where fixer uppers see less demand
Hoping to customize a home to your taste from day one

Common questions

Renovation loan FAQ

Can I choose my own contractor?

Yes, as long as the contractor is licensed, insured, and lender approved. For FHA 203(k) Standard loans, a HUD consultant helps manage the project. Most programs require licensed professionals, so do it yourself work generally is not allowed.

Can I live in the home during the work?

For smaller, non structural projects you often can. For major structural work under a Standard 203(k), temporary housing may be required, and those costs can sometimes be financed.

How long do I have to finish?

FHA 203(k) loans generally require completion within about 6 months of closing, and Fannie Mae HomeStyle allows up to 12 months. Realistic contractor timelines matter before closing.

How is this different from a HELOC?

A HELOC needs existing equity and typically has a variable rate. A renovation loan works at the time of purchase, before equity is built, and is based on the after improved value, potentially giving access to more funds.

Can I use one on a home that failed inspection?

Often, yes. Homes that fail conventional appraisals for condition issues such as roof, HVAC, or structural problems can frequently be purchased with a 203(k), with required repairs financed into the loan.

Free, no obligation

Explore your renovation loan options

Share a few details and a licensed advisor will walk through the renovation loan options that fit your project. No pressure, no obligation.

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