Buy the house it could be, with one loan.
Renovation mortgages finance the purchase (or refinance) and the improvements together, based on the home’s value after the work. The money for the work is held in escrow and released in draws as it’s completed. They open up houses that wouldn’t qualify as-is and let you fund a kitchen at mortgage rates instead of card rates.
- Found a well-located house that needs work
- Want to finance improvements on a home you already own
- Are looking at a property that won’t pass an as-is appraisal
- Can live with a longer, more involved process in exchange
Three renovation programs compared.
| Program | Down payment | Renovation scope | Property types | Notes |
|---|---|---|---|---|
| FHA 203(k) Limited | 3.5% | Non-structural repairs and improvements up to $75,000 confirm current cap | 1–4 unit primary residences; approved condos (interior only) | No consultant required; simpler paperwork |
| FHA 203(k) Standard | 3.5% | Structural work, additions, major rehab; $5,000 minimum | 1–4 unit primary residences | HUD consultant required; longer timelines; FHA MIP applies |
| Fannie Mae HomeStyle | 3–5% primary; more for second home/investment | Almost any permanent improvement, including luxury items; up to 75% of after-improved value | Primary, second homes, 1-unit investment; condos | Conventional pricing and cancellable PMI; contractor approval |
| Freddie Mac CHOICERenovation | Similar to HomeStyle | Broad scope; includes resilience improvements (e.g., storm hardening) | Similar to HomeStyle | Investor availability varies confirm |
VA offers a limited renovation option through some lenders; availability is narrow. Availability and exact terms through Jared’s lender to be confirmed before launch.
From bid to final draw.
Scope and bids
Licensed contractor bids that itemize the work. For 203(k) Standard, a HUD consultant writes the work write-up and cost estimate.
Appraisal on the after-improved value
The appraiser values the home as if the work were complete. The loan is based on that value (subject to program limits), not the as-is price.
Closing, with the renovation funds escrowed
Purchase funds go to the seller; renovation funds stay with the lender. A contingency reserve of 10–20% is typically built in.
Draws and inspections
The contractor is paid as stages are completed and inspected. Work must usually start within 30 days and finish within 6 to 12 months depending on program.
Final inspection and release
Permits closed, final draw released, leftover contingency applied to principal. You have one mortgage at one rate.
Worth it when the house is right. Know the friction.
Longer than a standard purchase: bids, consultant reports, and contractor approval all happen before closing. Build it into the contract dates.
Licensed, insured, and willing to work on a draw schedule. Self-performed work is restricted or excluded by most programs.
Slightly higher than a standard loan of the same program, plus consultant and inspection fees.
Some programs allow financing up to six months of payments if the home is uninhabitable during work (203(k) Standard).
If you already own with equity, a HELOC or cash-out refinance can be simpler. For a purchase, a renovation loan is often the only way to finance both at once.
Roof, impact windows, and electrical upgrades are common scopes and can reduce insurance premiums, which matters to the payment.
Common questions
Can I do the work myself?
Can I include a pool or luxury items?
How long do I have to finish?
Can I refinance into a renovation loan?
Describe the house and the work. Jared will tell you which program fits the scope.
If a simpler route exists, he’ll say so.
- No credit pull, no obligation
- Not an application; no guarantee of approval or terms
- Rather talk? Call or text 954-649-0020
The right house with the wrong kitchen is still the right house.
Jared can price the purchase and the work together.