If you’re buying a home that needs repairs, a renovation loan may finance the purchase and improvements together. In addition, these programs can help current homeowners fund eligible remodeling projects.

How Renovation Financing Works

Depending on the property and your goals, options may include FHA 203(k), Fannie Mae HomeStyle Renovation and VA renovation financing. For example, borrowers may use these programs for repairs, upgrades or properties that need improvements before meeting standard financing requirements.

However, requirements vary by program, property type, occupancy, credit profile and renovation scope. For instance, some programs focus on primary residences. In addition, eligible property types and renovation limits can differ. Therefore, the best option depends on the home and the planned improvements.

Another important benefit is the appraisal approach. The lender may base financing on the home’s expected value after eligible improvements are completed. As a result, buyers and homeowners may have more flexibility to finance repairs without relying only on the property’s current condition or value.

Before choosing renovation financing, schedule a phone or office consultation with us. That way, we can explain the process, compare the available programs and answer your questions.