Renovation Loan
Purchase and renovate in a single loan.
Combined financing for buying and improving a home, folded into one streamlined mortgage.
What is a Renovation loan?
Renovation loans wrap the home's purchase price and the renovation budget into a single mortgage. Funds are released to contractors as work is completed.
Designed for
Buyers taking on fixer-uppers or homeowners planning meaningful renovations.
Why choose it
One loan, one payment, one closing — rather than juggling separate financing for the purchase and remodel.
Common use cases
- ◆Fixer-upper purchases
- ◆Kitchen and bath remodels
- ◆Additions and expansions
- ◆Energy-efficiency upgrades
Built for borrowers who look like this.
First-time buyers
Purchasing a home that needs work.
Move-up buyers
Renovating a new home before moving in.
Investors
Value-add strategies on residential properties.
Homeowners
Refinancing into a rehab loan.
The advantages.
One closing
Combines purchase and rehab funds.
Improves buying options
Opens up homes that need work.
Value creation
Renovations can add to appraised value.
Multiple programs
FHA 203(k), Fannie HomeStyle, and others.
Things to weigh.
More documentation
Contractor bids, plans, and inspections required.
Timelines
Draw schedules and inspections extend project timing.
Contractor approval
Contractors must meet lender standards.
Contingency reserves
Budget cushions typically required.
What lenders generally look for.
Requirements vary based on lender guidelines and borrower qualifications. The below is educational — not a commitment or offer of credit.
- Documentation
- Detailed renovation plans and bids required
- Contractor
- Licensed and lender-approved
- Occupancy
- Primary residence most common; some programs allow other uses
- Program options
- FHA 203(k), HomeStyle, and other renovation programs
Answers to what borrowers ask most.
Can I use a renovation loan for major structural changes?
Yes, depending on the program (e.g., 203(k) full or HomeStyle).
Are DIY renovations allowed?
Most programs require licensed contractors.
How are funds released?
In stages, upon inspections of completed work.
Can I include appliances?
Some improvements may qualify; program-specific.
Can I refinance into a renovation loan?
Yes, homeowners can refinance and roll rehab into the new loan.
How long does renovation take?
Depends on scope; timelines are agreed to upfront.
Is the loan based on 'as-completed' value?
Typically yes.
Are 203(k) loans FHA?
Yes, FHA 203(k) is a common renovation option.
What is HomeStyle?
A Fannie Mae renovation program with broad eligibility.
Are contingency funds required?
Typically yes, to cover unexpected project costs.
Home Renovation Financing Guide
Purchase and remodel in one streamlined loan.
Run the numbers.
Educate yourself.
Complementary programs worth exploring.
Construction
Financing for building a new home, with a single closing that converts to permanent financing once construction is complete.
Explore Construction loan requirementsConventional
A traditional mortgage backed by Fannie Mae or Freddie Mac guidelines, offering competitive rates and flexible terms.
Explore Conventional loan requirementsFHA
A government-insured mortgage offering low down payments and flexible credit thresholds, ideal for first-time buyers.
Explore FHA loan requirementsHELOC
A revolving line of credit secured by your home's equity, letting you draw funds as needed.
Explore HELOC loan requirementsAsk about Renovation.
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