A renovation loan is a type of mortgage that allows you to finance both the purchase of a home and the renovation costs into one loan.

Exact qualifications vary by loan type. Most renovation loans require a steady income, that you meet the credit score requirements, and that you are able to make the down payment. All of these elements vary by loan program. More information on the differences between loan programs is available on the “Renovation Loans” page.

Yes, renovation loans are often ideal for first-time homebuyers. Renovation loans allow you to buy a fixer upper when move-in ready homes are too expensive. Renovation costs are financed, not paid out of pocket.

Renovation loans can be used for both major projects and small fixes. Renovation loans often cover things such as roof repairs, HVAC, plumbing, or electrical updates, flooring, painting, or safety updates.

Yes, the scope of work varies depending on the loan program. Room additions and second floor additions are allowed.

Down payment amounts vary per loan program. It can be 0% down for VA renovation loans and USDA. FHA loans would be 3.5% and conventional loans would be a minimum of 3% to 5%. Investor loans have a minimum of 15% to 20%.

No, generally no lender allows for self help on a renovation loan. It’s possible that an exception could be granted if you are a licensed contractor.

Generally all loans allow for an initial deposit to the contractor and then the remaining balance of the renovation escrow is through a draw process with site inspections. May vary depending on the size of the scope of work.

There are options to finance in mortgage payments depending on the scope of work and loan program. The house must be uninhabitable during the construction in order to finance in mortgage payments. Generally speaking you can finance in up to 6 months. This allows for no payments out of pocket during this period of time.