Renovation loans
Finance the home and eligible improvements with FHA 203(k), HomeStyle, or a portfolio solution.
Short answer
Renovation loans combine a home purchase or refinance with approved improvement funds. FHA 203(k) and Fannie Mae HomeStyle use different borrower, property, contractor, appraisal, and project rules. The right loan depends on the work, occupancy, available cash, and whether the completed value supports the total project.
Who this is for
- Buyers considering a home that needs repairs or modernization
- Owners refinancing to complete eligible improvements
- Borrowers comparing FHA 203(k), HomeStyle, and private renovation options
- Households that want one financing plan instead of separate purchase and repair debt
What it takes to qualify
- An eligible borrower, occupancy, and property under the selected program.
- A documented scope, contractor bids, contingency, permits, and draw process where required.
- An appraisal that considers the property subject to completion of approved improvements.
How it works with me
A process you can see the whole way through
Scope the work
Separate must-do repairs from upgrades and define the finished property.
Choose the program
Borrower profile, occupancy, property, work type, and cash decide the lane.
Approve value and budget
Bids, contingency, appraisal, permits, and contractor review are completed.
Close and control draws
Renovation funds are released as approved work is documented.
What to know before you decide
The house is underwritten twice
The lender reviews the home as it stands and the home the plans say it will become. The scope and bids must be specific enough for the appraiser and draw administrator to understand the finished result.
203(k) versus HomeStyle
FHA 203(k) can be more forgiving on borrower qualification and has FHA mortgage insurance and program-specific project rules. HomeStyle is a conventional renovation loan with conventional credit and mortgage-insurance treatment. Neither is automatically better.
Renovation financing
| FHA 203(k) | HomeStyle | Private renovation or bridge | |
|---|---|---|---|
| Loan family | FHA-insured | Conventional | Portfolio or business-purpose |
| Occupancy | Primary residence | Program-specific primary, second, or investment eligibility | Varies |
| Mortgage insurance | FHA MIP | Conventional MI may apply | Usually none, but pricing is different |
| Best use | Eligible repairs with FHA borrower profile | Conventional borrower and eligible improvements | Speed, complex condition, investor project, or bridge need |
Product eligibility, project rules, and availability change. Verify before writing the offer.
Rates and terms subject to change without notice. Not a commitment to lend. Not available in all states. This is not tax, legal, or financial advice. Consult a qualified professional for your specific situation.
Run your own numbers first
Use the payment calculator with the total financed project, including estimated mortgage insurance, taxes, and insurance.
Open the calculatorsRelated programs
Renovation loans: common questions
Can repair costs be included in the loan?
Yes, approved renovation costs can be financed within program limits and released through a controlled process.
Can I do the work myself?
Owner-completed work is limited or unavailable under many programs. Contractor requirements and documentation need review before relying on sweat equity.
What value does the appraisal use?
The appraisal generally analyzes the property subject to completion of the approved plans, along with applicable program rules.
Can renovation financing be used on an investment property?
Some conventional or portfolio programs allow eligible investment scenarios. FHA 203(k) is primarily an owner-occupied tool.
Fine-tune your Renovation loans plan
Send the property, purpose, timing, and numbers you already know. The email opens prefilled for this Renovation loans page so the review starts in the right lane.
MortgageOne Inc. is licensed for consumer mortgage lending in 41 states and Washington, DC. Chris Lamm is individually licensed in 19 states.