A renovation loan lets you buy or refinance a home and finance eligible improvements in one mortgage. Instead of draining savings for repairs after closing, rehab funds are built into the loan and released as work is completed.
You close on one mortgage that covers the home price (or payoff on a refinance) plus an approved renovation budget. The lender bases the loan on the after-improved value — what the property should be worth when the work is done — not just its current condition.
Renovation dollars are not handed to you at closing. They are held in a rehab escrow account and disbursed in draws as contractors complete milestones and inspections pass. That protects you, the lender, and the project timeline.
Ryan and Steve map your scope of work, contractor plan, and program rules before you write an offer — so you know whether FHA 203(k), HomeStyle, or VA renovation is the cleanest path for that fixer-upper.
Each program wraps purchase or refinance and rehab into one closing — but occupancy, down payment, and project size rules differ.
Standard 203(k) handles major structural and cosmetic work; Limited 203(k) covers smaller projects up to program caps. Popular for buyers with moderate credit who want one loan for a true fixer-upper.
Conventional renovation financing for primary homes, second homes, and investment properties when guidelines are met. Often fits borrowers with stronger credit who want flexible improvement scope.
For eligible veterans and service members who want to purchase or refinance and include approved repairs in the same VA-backed loan — subject to VA and lender overlays.
Separate purchase and construction loans mean two closings, two sets of fees, and timing risk. Renovation programs consolidate everything so you move in (or stay put on a refi) while improvements are managed through one file.
Understanding the draw process helps set realistic expectations before you shop for a project home.
Step 1
Contractor bids and a detailed improvement plan are submitted with your loan file.
Step 2
You fund the purchase or refi and the rehab escrow is established at closing.
Step 3
Contractors finish milestones; inspectors sign off before each draw is released.
Step 4
Most programs require work within a set window — often about six months from closing.
Related guides to help you compare options and move toward pre-approval.
Property types, occupancy rules, and common limits by program.
Which repairs can roll into the mortgage vs. cash or a separate product.
Program options, payment calculator, and full renovation hub.
Deep dive on FHA Standard and Limited 203(k) rehab financing.
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Recent articles on renovation loans, FHA 203(k), and fixer-upper financing.
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A renovation loan combines the purchase price (or current mortgage balance) and eligible improvement costs into one mortgage. Renovation funds are typically held in escrow and released to contractors as work is completed and inspected — not paid out in a lump sum at closing.
A standard purchase loan is based on the home as-is. A renovation loan is underwritten on the after-improved value and includes a rehab budget. That lets you buy a fixer-upper or refinance and upgrade systems in one closing instead of paying for repairs out of pocket after you move in.
FHA 203(k) Standard and Limited, Fannie Mae HomeStyle Renovation, and VA renovation loans are the programs Ryan and Steve use most. Each has different down payment, occupancy, contractor, and scope rules — the right fit depends on your credit, property type, and project size.
No. All loans are subject to credit, income, and property approval. Rates, fees, and program availability can change without notice and may not be available in all states. This page is educational — contact us for a personalized pre-approval review.
Know your buying power and rehab budget before you shop fixer-uppers. Ryan & Steve can match you to the right program and walk you through the draw process — averaging a 20-day close on straightforward files.