Renovation Loans for Homes That Need Work
Buy or refinance a home and roll renovation costs into one loan. FHA, conventional, VA, and USDA programs available in 7 states.
What Is a Renovation Loan?
Who Qualifies for a Renovation Loan?
Renovation loan eligibility depends on the program being used and typically includes:
- Primary residence occupancy requirements
- Credit and income qualification based on loan type
- Property eligibility and intended use
- Use of licensed contractors for renovation work
Some renovation programs are limited to owner-occupied properties, while others allow additional flexibility. A personalized review helps identify which programs may fit your situation.
How the Renovation Loan Process Works
Renovation loans include additional steps beyond a standard mortgage, which may include:
- Reviewing renovation plans and contractor estimates
- Appraising the home based on after-improved value
- Holding renovation funds in escrow
- Releasing funds as work is completed and inspected
Understanding these steps early helps keep renovation projects organized and expectations clear.
Mortgage Marketplace LLC is licensed to help home buyers in Oregon, California, Washington, Idaho, Texas, Florida, and Montana. View full licensing information.
A renovation loan combines the cost of buying or refinancing a home with the cost of approved repairs or improvements into one mortgage. Instead of taking out a separate loan for renovations, you finance everything together based on the home’s projected value after work is completed. Renovation loans are available through FHA 203k, conventional, VA, and USDA programs.
Mortgage Marketplace is licensed to help buyers and homeowners access renovation loans in Oregon, California, Washington, Idaho, Texas, Florida, and Montana.
Renovation Loan Programs Available
There are multiple renovation loan programs available, depending on your financial profile, property type, and renovation scope:
FHA 203k Loans
Designed for owner-occupied homes that need repairs or improvements. FHA 203k loans offer flexible qualification guidelines and are commonly used for both minor and major renovation projects.
Conventional Renovation Loans
Programs such as Fannie Mae HomeStyle® and Freddie Mac ChoiceRenovation® allow buyers and homeowners with stronger credit profiles to finance renovations using conventional loan guidelines. These programs often offer more flexibility in property types and renovation options.
VA Renovation Loans
Available to eligible veterans and service members, VA renovation loans allow approved repairs and improvements to be included in a VA-backed mortgage for primary residences.
USDA Renovation Loans
In eligible rural and suburban areas, USDA renovation loans can combine home purchase financing with renovation costs for qualified buyers purchasing a primary residence.
Each renovation loan program has specific guidelines, limits, and requirements that should be reviewed carefully.
What Can Be Included in a Renovation Loan?
Renovation loans can be used to finance many types of approved home improvements, depending on the loan program:
- Kitchen and bathroom renovations
- Roof replacement
- Flooring, windows, and doors
- Electrical, plumbing, and HVAC upgrades
- Structural repairs
- Accessibility and safety improvements
Is a Renovation Loan Right for You?
A renovation loan is the right option when you want to buy a home that needs work or improve a home you already own without taking out a separate personal loan or using credit cards. Rolling renovation costs into the mortgage gives you one payment and typically a lower interest rate than unsecured borrowing.
We identify which program fits your property type, credit profile, and renovation scope.
Renovation Loan Questions, Answered
Common questions about how DSCR loans work, who qualifies, and what to expect.
1. What is the difference between an FHA 203k loan and a conventional renovation loan?
2. Can I use a renovation loan to buy a fixer-upper
Yes. Renovation loans are specifically designed for buying homes that need repairs or improvements. The loan amount is based on the home’s projected value after renovations are complete, not its current condition. This means you can buy a home that does not qualify for a standard mortgage in its current state and finance the repairs needed to bring it up to standard.
3. Do I need to hire a licensed contractor for a renovation loan?
Yes. Most renovation loan programs require that work be completed by a licensed contractor. Self-performed work is generally not allowed with FHA 203k or conventional renovation loans. The contractor provides a detailed scope of work and cost estimate before the loan is approved, and funds are released in stages as work is completed and inspected.
4. How long does a renovation loan take to close?
Ready to Finance Your Home Renovation?
We match you with the right renovation loan program based on your property, project scope, and financial profile. Licensed in OR, CA, WA, ID, TX, FL, and MT.
Review Your
Renovation Loan options
Renovation loan availability, limits, and requirements vary by program, property type, and financial profile. Start with a personalized review to explore FHA, conventional, VA, and USDA renovation loan options and see how renovation financing could support your homeownership plans.
