Home Renovation Loans

What is a Renovation Loan?

Renovation loans provide borrowers with additional funds to cover renovations or large remodeling projects when they buy or refinance a home. The loan is combined with the mortgage or refinance loan so the borrower has only one monthly payment.

How Does a Renovation Loan Work?

A renovation loan lets buyers take out max financing based on the "after-improved" value of a home, or how much the house is estimated to be worth after the renovations are complete. That gives them more room in their budget.

We offer three financing options to meet the needs of any homeowner and any project: the FHA Limited 203(k) loan, the FHA Standard 203(k) loan, and the HomeStyle Renovation loan.

A builder fitting a kitchen in a home that's under renovation

What is an FHA Limted 203(k) Loan?

The FHA Limited 203(k) loan is a government-insured loan program that lends buyers up to $35,000 on top of their mortgage to make minor changes to an existing home.


This loan is ideal for installing new appliances, repairing decks, painting or upgrading roofs, and fixing things like drainage systems, septic systems, HVAC systems, plumbing, electrical systems, and flooring.


Details include:

  • No structural repairs allowed

  • No minimum repair amount

  • The maximum repair amount can't exceed $35,000

  • All work must be completed within six months 

What is an FHA Standard 203(k) Loan?

The FHA Standard 203(k) loan provides renovation financing for homes that require major renovations, structural repairs, or other changes exceeding $35,000. It covers everything from minor rehabilitation to complete tear-downs.

The buyer can make significant changes to the home's function, improve health and safety standards, make the home more accessible, or complete a major landscaping project. As long as the foundation remains in place, a home can be demolished or razed as part of rehabilitation and still be eligible for a Standard FHA loan. If the house is uninhabitable during construction, borrowers can finance up to six months of mortgage payments.

Details include:

  • One general contractor required

  • FHA-approved HUD consultant required

  • $5,000 minimum repair amount

  • No maximum amount other than the county loan limit

  • No luxury items like pools or gazebos

  • All work must be completed within six months

  • The borrower must occupy the property as their primary residence within 30 days of the closing

HUD Consultants

All standard FHA 203(k) loans require a HUD-approved consultant to help navigate and oversee the construction process.

The HUD Consultant:

  • Meets with borrowers at the subject property

  • Conducts walk-through and inspection of the home

  • Prepares Work Write-Up (WWU) and cost estimate

  • Coordinates draw process

  • Coordinates planned inspections

  • Prepares draw inspection paperwork for disbursements

What is a HomeStyle Renovation Loan?

The HomeStyle Renovation loan is similar to FHA loans, but it allows buyers to finance luxury items like swimming pools, detached garages or gazebos in addition to basic renovations. It can be used for a primary residence, secondary residence or investment property.

This loan is great for conventional borrowers and includes one application, one closing, and one set of fees. Like the FHA 203(k) loan, the HomeStyle Renovation loan lets borrowers finance six months of mortgage payments if the house is uninhabitable during construction.

Details include:

  • HUD Consultant may be required

  • No minimum borrowing amount

  • Maximum amount of repairs can't exceed 75% of the "after-improved" value

  • Loan amount can't exceed max county loan limit

  • All work must be completed within 12 months

How Much Can You Borrow?

You have are a few options for renovation loans depending on the extent of the renovations you have planned:


  • An FHA 203(k) Limited loan lets you borrow up to $35,000.

  • An FHA 203(k) Standard loan lets you borrow over $35,000.

  • A HomeStyle Renovation loan lets you borrow up to 75% of the home’s after-improved value for luxury renovations.

Security First Financial is here to answer any questions you have.
We can help you understand more about:
  • Home loan Programs
  • Current mortgage rates
  • The home loan process
  • What you'll need for your application
  • What to expect after you complete your application

Apply for a Renovation Loan Online