RENOVATION LOANS
Renovation Loans: Finance a Fixer-Upper, Repairs, or Home Improvements
Renovation loans can help you finance a home purchase or refinance while including funds for repairs, upgrades, or improvements. Andes Mortgage helps you compare the right program for your goals.
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Renovation Loan Snapshot
Finance purchase + repairs
Options for primary homes and investors
FHA, VA, conventional, and private options
Great for fixer-uppers and value-add projects
Buy a fixer-upper
Finance the purchase and repairs with one loan.
Renovate your current home
Refinance and improve your home’s value and comfort.
Use FHA, VA, or conventional options
Choose the program that fits your needs and budget.
Investor rehab financing
Solutions for investors and value-add projects.
RENOVATION LOAN STRATEGY
Renovation financing is not one-size-fits-all
Some renovation loans are built for primary homebuyers, some are for refinancing and improving your current home, and others are for investors buying distressed properties and rehabbing for profit.
The right option depends on your occupancy plans, the scope of work, your timeline, and whether the property is a long-term home or part of an investment strategy.
🎥 Watch: Renovation Loans Compared
The right renovation loan depends on who is using the property, how much work is needed, and how the project will be completed.
RENOVATION LOAN OPTIONS
Compare Renovation Loan Programs
Each renovation loan works differently. The best fit depends on whether you are buying, refinancing, living in the home, or investing.
Fannie Mae HomeStyle Renovation
A flexible conventional renovation loan with broad eligibility and project options.
Best for
Conventional borrowers wanting flexibility
Can be used for
Primary, second homes, and some investment properties
Important Note
Great for well qualified buyers or homeowners who want one loan for the home and improvements.
FHA 203(k) Loan
An FHA-backed renovation loan designed to help buyers with lower down payment needs.
Best for
Primary homebuyers with lower down payment needs
Can be used for
Purchase or refinance plus approved repairs
Important note
Limited vs Standard 203(k) programs will give you different amounts for rehab
VA Renovation Loan
Renovation options for eligible veterans and service members using their VA home loan benefit.
Best for
Eligible veterans and service members
Can be used for
Buying or refinancing a primary residence with approved repairs
Important note
Up to $75,000 in rehab funds
Fix-and-Flip / Investor Rehab Loans
Short-term financing built for investors who buy, rehab, and sell for profit.
Best for
Real estate investors and short-term rehab projects
Can be used for
Flips, BRRRR strategies, and value-add opportunities
Important note
Investment properties only, structured as a commercial note to LLCs only.
Homebuyer, homeowner, or investor?
Start with your goal. Renovation financing looks different depending on whether you are buying, improving, or investing.
Buying a fixer-upper?
Consider FHA 203(k), HomeStyle, or VA renovation options to finance the purchase and repairs in one loan.
Already own the home?
Explore renovation refinance options including cash-out refinance, HELOC, or home equity loan depending on your goals.
Investing or flipping?
Look at investor rehab or fix-and-flip financing to fund your project and maximize your potential return.
PROGRAMS COMPARED
HomeStyle vs FHA 203(k) vs VA Renovation vs Fix-and-Flip
|
Program
|
Best For
|
Occupancy
|
Down Payment / Equity
|
Repair Scope
|
Investor Friendly
|
|---|---|---|---|---|---|
|
HomeStyle Renovation
|
Conventional borrowers wanting flexibility
|
Primary, second home, investment
|
Varies by loan profile
|
Minor to major improvements
|
Yes, in some cases
|
|
FHA 203(k)
|
Buyers with lower down payment needs
|
Primary residence
|
FHA minimum down payment may apply
|
Limited or standard renovation options
|
No
|
|
VA Renovation
|
Eligible VA borrowers
|
Primary residence
|
VA benefits may allow 0% down
|
Approved repairs and improvements
|
No
|
|
Fix-and-Flip
|
Real estate investors
|
Investment property
|
Larger down payment/equity usually required
|
Rehab, resale, value-add projects
|
Yes
|
Which Renovation Loan Is Right for You?
If you want a low down payment renovation loan:
Consider the FHA 203(k) →
If you are VA eligible:
Look at VA renovation options →
If you are flipping or rehabbing:
Let’s look at investor rehab loans →
How Do Renovation Loans Work?
A renovation loan combines the cost of the property and eligible repairs into one financing structure. This allows you to purchase or refinance now while including funds for improvements.
Lenders typically require contractor estimates, scope of work, and a review of the project to ensure the repairs add value and meet guidelines.
Repair funds are usually held in escrow and released in draws as work is completed and approved, helping protect both you and the lender.
Renovation Loan Options Available
For homebuyers, homeowners, and investors.
Purchase or refinance renovation options
FHA 203(k), VA renovation, HomeStyle, and investor rehab loans
Contractor bid and repair escrow guidance
Options for homeowners and investors
Compare programs before choosing the wrong loan
Compare Renovation Loan Rates
Rates vary by program, property type, credit profile, down payment, and repair scope. Andes Mortgage can help you compare renovation loan options so you can choose with confidence.
Why Work With a Mortgage Broker?
Renovation loans are more complex than standard mortgages. A broker can help you compare multiple lenders, program guidelines, and loan structures to find the right fit for your project.
Related resources
HomeStyle Renovation Loans
Flexible conventional renovation financing with broad options.
GOT QUESTIONS?
Frequently asked questions
What is a renovation loan?
A renovation loan is a mortgage that can include funds for repairs, upgrades, or improvements. Likewise, it can be a second lien rehab loan such as a HELOAN or HELOC.
Depending on the program, it may be used when buying a home or refinancing a property you already own.
Can I buy a fixer-upper with a renovation loan?
Yes. Renovation loans are commonly used to buy homes that need repairs or updates. The loan can help finance both the purchase price and eligible renovation costs.
At Andes Mortgage, we offer HomeStyle, FHA 203(k), VA Reno and Fix and Flip loans.
What is the difference between FHA 203(k) and HomeStyle Renovation?
FHA 203(k) is backed by the Federal Housing Administration and is generally used for primary residences. The minimum down payment required is 3.5% if credit scores are 580+
The HomeStyle Renovation is a conventional renovation loan offered with as low as a 3% down payment for first time homebuyers and 5% down payment for repeat buyers.
This loan may offer more flexibility for certain projects and occupancy types.
Can I use a VA loan for renovations?
Yes! The VA Renovation program allows eligible VA borrowers finance the purchase price of the home as well as up to $75,000 for rehab costs.
The VA Rehab program is only available for primary homes.
Can investors use renovation loans?
Yes, investors have access to the HomeStyle conventional renovation loan for an investor who plans to hold on to the property after the rehab is finished, while fix-and-flip or private rehab loans are often designed specifically for investors looking to sell as quickly as possible.
Do renovation loans require contractor estimates?
Yes. All renovation programs require a detailed contractor bid, repair scope for appraisal and underwriting purposes. In some programs, the lender must approve the contractor doing the work.
Do renovation loans take longer to close?
Often, yes. Renovation loans may require contractor bids, project approval, appraiser review, and repair escrow setup, so it is important to start early.
Can Andes Mortgage help me compare FHA 203(k), VA renovation, and HomeStyle loans?
Yes. Andes Mortgage works as an independent mortgage broker, which means we can compare renovation loan options across different lenders instead of limiting you to one bank’s program.
What if the property needs major repairs before I move in?
That depends on the loan type and scope of work. Some programs allow more significant repairs, while others are limited to smaller improvements or required property repairs.
Are renovation funds given directly to me?
In many cases, renovation funds are held in escrow and released through a draw process as work is completed.
Ready to compare renovation loan options?
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