Renovation Loans (FHA 203(k) & Conventional Renovation)
One loan. One closing. The home you actually want.
Roll the purchase (or refinance) and the renovation cost into a single loan, with one closing and one monthly payment — ideal for buying a fixer-upper or updating a home you already own.
Program Highlights
- FHA Limited 203(k): for lighter cosmetic/non-structural work, up to $35,000 in repairs
- FHA Standard 203(k): for larger projects, including structural repairs, additions, or major remodels
- Conventional renovation options (e.g., HomeStyle) with similarly flexible down payment and credit guidelines to standard conventional loans
- Based on the home's after-improvement value, not just its as-is condition
- One closing, one loan, one monthly payment instead of a mortgage plus a separate renovation loan
- Funds for contractors are disbursed through a draw/inspection process as work completes
- Can be used for purchase or refinance of a home you already own
Best For
- Buyers who found the right house in the wrong condition
- Homeowners financing a major renovation without draining savings
- Anyone who wants instant equity through renovation
What You'll Need to Qualify
- Contractor bids and a detailed scope of work required
- HUD consultant needed for larger Standard 203(k) projects
- Based on the home's after-improvement value
- Licensed, insured contractors required
Guidelines vary by lender and borrower profile. All loans subject to underwriting approval. Not a commitment to lend.
Good to Know
renovation loans require more documentation up front — contractor bids, a detailed scope of work, and sometimes a HUD consultant for larger FHA 203(k) projects — so it's worth lining up your contractor and scope early in the process.
Common Questions
Can I use this to buy a home that needs major structural work?
Yes — FHA Standard 203(k) and conventional renovation programs can cover structural repairs and additions, not just cosmetic updates.
Do I need to have a contractor picked out before applying?
You'll need contractor bids and a scope of work as part of the loan file, so it helps to start that process early.
How does the contractor get paid?
Through a draw schedule — funds are released as phases of work are completed and verified, similar to a construction loan.