Renovation Loans

What is renovation financing?

Our renovation loans may help you finance a home and cover the cost of improvements ranging from basic repairs or upgrades to more expensive additions or rebuilding. Qualified customers can buy or refinance a home, plus finance needed improvements or repairs — all in one convenient transaction.

The amount for which you may qualify is based on the expected value of your home after improvements are made. Work can begin after the loan has closed and must begin within 30 days of closing. Then you pay for the renovations gradually, over the entire term of your mortgage.

The process is completed in five easy steps:

  1. Find a property with your real estate agent and determine the improvements you would like to make.
  2. Contact Licensed Contractors to get quotes for the eligible improvements.
  3. Submit all information to your Renovation Mortgage Consultant.
  4. A property appraiser will be utilized by us to determine the property’s after-improved value.
  5. Proceed to the loan closing, and renovations may begin!

A renovation loan may work for you.

  • Owner-occupied homes only
  • Foreclosured properties are eligible
  • 1-4 unit properties are eligible
  • 3.5% down payment is required (may be gifted from a family member or relative)

Renovation Loan Reference Guide

Product FHA 203(k) Streamline FHA 203(k)
Types of repairs
  • Health & safety, livability
  • Structural repairs not allowed
  • Luxury items not allowed
  • Health & safety, livability
  • Structural repairs allowed
  • Luxury items not allowed
Minimum repair No minimum limit $5,000
Renovation amount Maximum renovation costs $35,000
inclusive of required financed fees
No limit
Property age 1 year old 1 year old
# of contractors Maximum 3 contractors General contractor
Self help Not Allowed Not Allowed
Loan types Fixed rate, 30 years Fixed rate, 30 years
Loan limits FHA county loan limits
including high balance
FHA county loan limits
including high balance
Transaction types
  • Purchase
  • Rate/term refinance
  • Purchase
  • Rate/term refinance
Occupancy types Owner occupied only Owner occupied only
Homebuyer education Not required Not required

Units

1-4 units

1-4 units

Contingency reserve

Additional funds financed into loan for unforeseen repairs and/or cost overruns.

Additional funds financed into loan for unforeseen repairs and/or cost overruns

Payment schedule
  • 50% may be released at closing, final 50% after inspection for each contractor of record
  • Each contractor may receive a maximum of two draws
  • No draws at closing
  • Inspections are required to release fundsPayments are made are a HUD-approved consultant approves work