Renovation Loans
"Finance the house AND the work."
Purchase and renovation financing in one loan. FHA 203K, Conventional HomeStyle, and other options to turn a fixer-upper into your dream home.
3.5-5%
Min Down
620+
Min Credit
Based on ARV (After-Repair Value)
Max Loan
Is This Loan Right for You?
This Loan is Perfect If You...
- Buying a fixer-upper property
- Want instant equity from improvements
- Don't have cash for repairs after down payment
- See potential in a dated or distressed home
- Willing to work with approved contractors
This Might NOT Be Right If...
- Need to move in immediately (renovation takes time)
- Want to DIY everything (some programs require licensed contractors)
- Looking for a move-in ready home
- Cannot find approved contractors in your area
- Have very tight renovation timeline
Renovation Loans Benefits
Everything you need to know about your benefits
One Loan, One Closing
Finance purchase and renovations together—no separate construction loan needed
Based on After-Repair Value
Borrow based on what your home WILL be worth, not just current value
Low Down Payment
As little as 3.5% down for FHA 203K or 3% for HomeReady
Finance Major Renovations
Kitchens, bathrooms, additions, structural repairs—even combine units
Multiple Program Options
Choose FHA 203K, HomeStyle, or HomeReady based on your situation
Instant Equity
Complete renovations and own a home worth more than you paid
How It Works
Your path to homeownership in just a few simple steps
Find a Fixer-Upper
Identify a property with renovation potential. We can help you understand what's financeable.
Get Contractor Estimates
Work with approved contractors to develop a detailed scope of work and cost estimates.
Loan Based on ARV
Your loan amount is based on the after-repair value, not just the purchase price.
Close, Renovate, Enjoy
Close on the property, complete renovations, and enjoy instant equity in your improved home.
Find a Fixer-Upper
Identify a property with renovation potential. We can help you understand what's financeable.
Get Contractor Estimates
Work with approved contractors to develop a detailed scope of work and cost estimates.
Loan Based on ARV
Your loan amount is based on the after-repair value, not just the purchase price.
Close, Renovate, Enjoy
Close on the property, complete renovations, and enjoy instant equity in your improved home.
Types of Renovation Loans
Choose the option that fits your situation
FHA 203(k)
3.5% down payment with Limited ($35K max) or Standard options. More flexible credit requirements. Government-backed.
Learn moreConventional HomeStyle
5% down payment with higher renovation amounts allowed. More property types eligible. Conventional guidelines.
Fannie Mae HomeReady
For lower-income borrowers. As little as 3% down with renovation component. Income limits apply.
Things to Consider
A reverse mortgage is a significant financial decision. Here's what you should understand before proceeding.
Contractor Requirements
Most renovation programs require licensed, insured contractors. DIY work is typically limited to cosmetic items only.
Timeline Expectations
Renovations take time. Limited 203K must complete within 6 months; Standard within 12 months. Plan accordingly.
Living Arrangements
Depending on scope, you may need temporary housing during renovation. Factor this into your budget.
HUD-approved counseling is required to ensure you fully understand these factors before proceeding.
Loan Details
Documentation Required
- Standard income and asset documentation
- Contractor bids and scope of work
- Property appraisal (current and after-repair value)
- Contractor license and insurance
- Draw schedule for renovation phases
Eligible Property Types
- Single-family homes
- 1-4 unit properties (FHA)
- Condos (with restrictions)
- Townhomes
Additional Info
- Renovation must be completed within 6 months (Limited 203K) or 12 months (Standard)
- Some cosmetic-only projects may not qualify
- Property must be habitable after renovation
- HUD consultant required for Standard 203K
Compare Renovation Loan Options
| Feature | FHA 203(k)(This loan) | HomeStyle | HomeReady |
|---|---|---|---|
| Minimum Down Payment | 3.5% | 5% | 3% |
| Minimum Credit Score | 580+ | 620+ | 620+ |
| Max Reno Amount | Limited: $35K / Standard: Higher | 75% of ARV | 75% of ARV |
| Luxury Upgrades | No (must be functional) | Yes | Limited |
| Government Backed | Yes | No | No |
| Income Limits | No | No | Yes (area-based) |
| HUD Consultant Required | Standard only | No | No |
* Rates and terms subject to change. Contact us for current offers.
Frequently Asked Questions
Common questions about Renovation Loans
Last updated:
How does a renovation loan work?
A renovation loan combines your home purchase and renovation costs into a single mortgage. You finance based on the after-repair value (ARV) of the home, close on one loan, and use funds to complete renovations. Funds are released in draws as work is completed.
What's the difference between FHA 203K and Conventional HomeStyle?
FHA 203K offers lower down payments (3.5%) and more flexible credit, but has limits on luxury upgrades. HomeStyle requires 5% down with higher credit scores but allows more property types and cosmetic upgrades. HomeStyle also doesn't require a HUD consultant.
Can I do the renovation work myself?
Limited DIY is allowed for cosmetic work like painting or landscaping, but structural and major systems work must be done by licensed contractors. FHA 203K Standard requires all work be done by licensed contractors.
- Funds are held in escrow and released in stages (draws) as work is completed. An inspector verifies completion before each draw. This protects you and ensures work is done properly.
- Almost anything that adds value: kitchen/bath remodels, new roof, HVAC, windows, additions, accessibility modifications, and more. Some programs restrict luxury items like pools (FHA 203K).
- Limited 203K: 6 months. Standard 203K and HomeStyle: typically 12 months. Extensions may be possible with lender approval.
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Ready to Transform a Fixer-Upper?
Let's find the right renovation loan for your project
Or call us directly: (757) 558-2603