Quick answer
- Who it may fit
- Buyers or owners financing eligible improvements with a purchase or refinance.
- Closing cash & project budget
- Down payment or equity follows the underlying program; include closing costs and project contingencies.
- Insurance & fees
- Insurance and fees depend on the first-mortgage program; project draws can add costs.
- Key eligibility
- Approved scope, contractor, budget, eligible property and after-improvement appraisal matter.
- Main tradeoff
- One financing plan for work comes with extra documentation and draw oversight.
Down payment is not total cash to close. Educational guidance pending licensed review.
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Renovation programs let the loan amount reflect the home's value after planned improvements rather than its condition today. That opens up houses that need work and rolls the project into one mortgage instead of a separate, higher-cost construction facility.
- Buyers looking at homes that need updating before move-in
- Owners planning substantial improvements to a current home
- Buyers competing for listings other financing may not accept
- Purchase price and renovation budget are financed together
- The loan can be based on the value after completion, subject to program rules
- Both government and conventional versions exist, with different scopes of eligible work
- Contractor bids, scope documentation and a draw schedule are required
- The process involves more steps and typically more time than a standard loan
- Eligible improvements and budget limits vary by program
- Work generally must be performed by approved contractors
These are the factors an underwriter typically reviews. They are not a checklist of requirements, and meeting them does not guarantee eligibility or approval.
- Standard credit, income and asset review for the underlying program
- A detailed, approved renovation scope and budget
- An appraisal reflecting the planned work
- An eligible property type
All loans are subject to credit, income, property and underwriting approval. Nothing on this page is a loan offer, an approval, a rate lock or a commitment to lend. Programs, rates and terms are subject to change without notice.