Figuring out which home renovation loan is the best fit for your project and your budget can be overwhelming. Whether you need to need to make a few repairs here and there or totally gut your new home, there are loan available to meet the needs of every homeowner and every project. Here are a few common renovation challenges and their most suitable loan options:

“I need less than $35,000 to make minor repairs.”

The FHA Limited 203(k) program is a great option for homeowners who need less than $35,000 to finance minor home repairs or replacements like plumbing, insulation, roofing or flooring. This program allows for homebuyers to include an additional $35,000 into their mortgage to cover the cost of making limited repairs to their home. Other eligible activities include: interior and exterior paint; repairing drainage, HVAC, and electrical systems; installing new appliances and adding a deck or patio.
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“I need affordable credit to remove health and safety hazards.”

The USDA Section 504 Home Repair Program provides both financing and grants for very-low-income homeowners. Families with income below 50 percent of the area median income that are unable to obtain affordable credit can get a loan of up to $20,000 to repair, improve or modernize their homes. 20 year loans are offered at a fixed 1% interest rate. Grants are also available to homeowners age 62 or older that are unable to repay a repair loan. Grant recipients receive $7,500 to remove health and safety hazards. Loans and grants can be combined for a total of $27,500 in renovation funding.

"I want to finance luxury upgrades."

With a Fannie Mae Homestyle Renovation Program Loan, you can finance luxury upgrades like new swimming pools, gazebos or detached garages that are not allowed under FHA guidelines. The Homestyle program application process is also much simpler than the other options. There is one application for both the home purchase and the renovation loan, one closing and one set of fees.  As with the FHA Standard 203(k) program, you can finance 6 months of mortgage payments if the house is uninhabitable during construction.
NAIHBR’s lender members offer renovation loan options for every type of project and homeowner. For more information or to join NAIHBR contact us at 855-733-8100.
Jeffrey Cook, Executive Director

Jeffrey Cook

NAIHBR Executive Director

Meet the Author ...

Jeffrey Cook

20 year veteran of IT and real estate marketing systems development. Jeff co-founded and was the development architect for the Home123 marketing platform.