Renovation & fixer-upper financing
Buy the home with potential—and finance eligible improvements too.
Renovation financing can combine the home purchase and qualifying renovation costs into one mortgage and one closing, giving buyers another way to consider homes that need updates or repairs.
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FHA 203(k)HomeStyle®CHOICERenovation®VA RenovationUSDA Renovation
Renovation loan guidelines at a glance
Key program details clients usually want to know first.
These are concise CCM program highlights, not a full underwriting matrix. Credit, property, project, loan-limit and underwriting requirements can change and final eligibility is determined through underwriting.
FHA 203(k)
- Down payment
- As little as 3.5%*
- Credit
- 600 minimum CCM guideline*
- Property
- Primary residence, generally 1–4 units*
- Project size
- Limited: up to $75K in eligible improvements; Standard: larger or structural projects*
- Consultant
- Standard projects require a renovation consultant; Limited generally does not*
FHA 203(k) can combine the home purchase and qualifying renovation costs into one mortgage. Existing pools may be repaired, but new pool installation is not permitted under FHA 203(k).
Fannie Mae HomeStyle®
- Down payment
- As little as 3% for eligible first-time homebuyers*
- Property
- Primary residence, second home and eligible investment scenarios*
- Project type
- Cosmetic, structural and qualifying luxury improvements*
- Consultant
- Generally required when repairs exceed $75K*
- Value
- Financing may consider the home's future value after improvements*
Eligible improvements can include kitchens, bathrooms, additions, detached structures and a new pool, subject to program guidelines.
Freddie Mac CHOICERenovation®
- Down payment
- As little as 3% on eligible transactions*
- Property
- 1–4 unit owner-occupied, certain second homes and single-unit investment properties*
- Project type
- Cosmetic, structural, additions and health/safety renovations*
- Consultant
- May be required depending on project size and scope*
- Loan amount
- Subject to applicable conventional loan limits*
Designed for both smaller updates and larger renovation projects, subject to Freddie Mac and CCM requirements.
VA Renovation
- Purchase LTV
- Up to 100% for eligible Veterans*
- Refinance LTV
- Up to 90%*
- Credit
- 600 minimum CCM guideline*
- Project size
- Limited: under $75K, minor/non-structural; Standard: larger or structural projects*
- Property
- Qualifying primary residence*
VA renovation can accommodate eligible repairs and larger renovation scopes. Tear-downs, new construction and luxury items are not permitted under this renovation program.
USDA Renovation
- Purchase LTV
- Up to 100% for eligible borrowers and properties*
- Credit
- 600 minimum CCM guideline*
- Property
- Eligible single-unit primary residence*
- Limited
- Up to $75K in eligible renovation costs*
- Full
- No stated repair-cost maximum, subject to overall program limits*
USDA renovation is a purchase-focused option for eligible borrowers and qualifying properties in USDA-eligible areas.
What can you renovate?
Think beyond a basic kitchen or bathroom update.
Renovation financing can work for small cosmetic projects through major construction. What is eligible depends on the selected program.
01Kitchen & bathroom
Remodel kitchens, add or renovate bathrooms, replace cabinets, counters, fixtures and finishes.
02Layout & living space
Open walls, change bedroom or bathroom counts, create larger closets or primary suites, and finish basements.
03Additions & garages
Add living space, an attached or detached garage, or other eligible residential improvements.
04ADUs & in-law suites
Attached ADUs can fit FHA/VA guidelines; HomeStyle and CHOICE may allow detached ADUs, subject to program rules.
05Pools & outdoor upgrades
HomeStyle/CHOICE can permit a new pool and certain luxury items. FHA 203(k) can repair an existing pool but does not allow a new pool installation.
06Major repairs
Roofing, structural repairs, full-gut renovations, septic work and even certain tear-down/rebuild scenarios may be eligible depending on the program.
How it works
One financing plan for the purchase and the project.
A contractor scope and renovation budget help establish the planned improvements and after-renovated value before closing.
1. Find the property
Identify a home that needs repairs, modernization or customization.
2. Define the work
A licensed and insured contractor prepares the eligible scope and bid.
3. Review the ARV
The appraisal considers the planned improvements and the home's after-renovated value.
4. Close & renovate
The purchase and renovation financing are structured together, with renovation funds released as eligible work is completed.
Renovation loan questions
Common questions about buying and renovating a home.
These answers are intentionally short so buyers can quickly understand what may be possible before getting into program details.
Can I finance the home purchase and renovation together?
Yes. Eligible renovation programs can combine the purchase price and qualifying renovation costs into one mortgage and one closing, subject to the selected program's requirements.
How much down do I need for an FHA 203(k) renovation loan?
Eligible FHA 203(k) borrowers may be able to put as little as 3.5% down. FHA 203(k) is for qualifying primary residences and other FHA and CCM underwriting requirements apply.
What is the difference between FHA 203(k) Limited and Standard?
Under current public CCM renovation guidance, FHA 203(k) Limited is generally for eligible improvements up to $75,000 and is intended for non-structural work. Standard is used for larger or structural projects.
Can I add or renovate a bathroom with a renovation loan?
Yes, eligible renovation financing can include remodeling bathrooms or adding a bathroom, along with kitchens, flooring, layout changes and other qualifying improvements.
Can I add an ADU or in-law suite?
Potentially. FHA 203(k) and VA renovation guidelines can allow eligible attached ADUs. HomeStyle and CHOICERenovation may also allow detached ADUs, subject to program and property requirements.
Can a renovation loan finance a swimming pool?
It depends on the program. HomeStyle and CHOICERenovation can allow a new pool and certain luxury improvements. FHA 203(k) can generally finance repairs to an existing pool but not installation of a new pool.
Can I buy a fixer-upper with a VA renovation loan?
Eligible Veterans may use VA renovation financing for a qualifying primary residence. Current CCM guidance allows major renovation scopes, while full tear-down projects are not permitted under VA renovation.
Can USDA renovation financing provide 100% purchase financing?
For eligible borrowers and qualifying rural primary residences, USDA renovation financing may allow up to 100% purchase LTV, subject to USDA and CCM requirements.
Do I need a contractor before closing?
A contractor bid or other program-required renovation documentation is generally needed before closing so the scope, costs and after-renovated value can be reviewed.
Can renovation financing cover structural work or a major rehab?
Yes, depending on the program. Standard renovation options can accommodate larger projects, structural work, additions and other major improvements when the property and project meet program requirements.
Found a home that needs work?
Send the property, purchase price and rough renovation budget. I can help you identify which renovation path may fit before you move forward.