Found a home with great bones but a dated kitchen or a roof that needs work? A renovation loan lets you finance the purchase and the improvements together, so you do not need a separate pile of cash for repairs.
The two main options
- FHA 203k: a government-backed renovation loan with a low down payment and flexible credit
- Conventional HomeStyle: a renovation loan that can be used on primary homes, second homes, and some investment properties
How the money works
Your loan is based on the home's value after the planned improvements, not just its current condition. The repair funds are held back and released to contractors as the work gets done.
Good uses
- Kitchen and bathroom updates
- Roof, HVAC, and major systems
- Structural repairs and accessibility upgrades
Renovation loans take a bit more planning because contractors and estimates are involved. Start the conversation early so your timeline stays smooth.