Renovation Loans

Renovation loans are designed for buyers and homeowners who want to finance both a property and the cost of improvements under a single mortgage. Instead of paying for renovations out of pocket or taking on separate loans, this option allows upgrades to be built directly into the financing.

These programs are commonly used when purchasing homes that need repairs or updates, or when refinancing to improve an existing property. Options may include programs such as FHA 203(k) and Fannie Mae HomeStyle®, each with different guidelines depending on the scope of work and borrower profile.

With a renovation loan, eligible borrowers may be able to:

• Combine the purchase or refinance of a home with renovation costs into one loan
• Finance cosmetic updates, structural repairs, or major renovations
• Improve comfort, functionality, and long term property value
• Spread renovation costs over the life of the mortgage
• Build equity by improving the home rather than overpaying upfront

Renovation loans also come with additional considerations. These loans typically require contractor approvals, detailed renovation plans, and tighter timelines. Funds are released in stages as work is completed, not all at once. Appraisals are often based on the future value of the home after improvements, which makes accurate budgeting critical. Because of the added complexity, renovation loans can take longer to close than standard purchase loans.

Renovation financing works best for buyers who see potential in a property and are prepared to plan ahead. When structured properly, it can be a powerful way to turn a fixer upper into a long term home or investment without draining savings.

If you are considering a renovation loan, understanding the process and requirements upfront helps determine whether this approach fits your goals and timeline.

Mortgage loans are not originated on this site. All applications are processed through United Mortgage Corp (NMLS 1330). Christopher Crespo NMLS 2040756.