Renovation Loans

Buy the fixer-upper and finance the repairs in one loan

Kitchen remodel in progress with new cabinets, a ladder and a hard hat on the counter

A renovation loan lets you buy a home and pay for repairs or improvements with a single mortgage. Instead of needing cash on hand after closing, the cost of the work is built into the loan from the start. In an area with a lot of older homes and acreage properties, this can open up houses that would not qualify for a regular loan as they sit.


The main programs

The two most common are the FHA 203(k) loan and the Fannie Mae HomeStyle loan. The FHA version allows a 3.5 percent down payment and more flexible credit. HomeStyle is a conventional loan with a 5 percent down payment and no upfront mortgage insurance. There is also a VA renovation option for eligible veterans. Your lender will help you choose.


How it works

The lender orders an appraisal based on what the home will be worth after the work is done, and the loan amount is based on that value. You pick a licensed contractor, submit a scope of work and bids, and the repair money is held by the lender and paid out as the work is completed and inspected. Most programs require the work to finish within six to twelve months.


What to know for North Idaho properties

Renovation loans can cover roofs, wells, septic systems, heating, plumbing, electrical, kitchens, baths, windows and more. They cannot cover a barn, shop or other outbuilding under most programs. Contractors in our area are busy, so having a bid lined up before you make an offer helps the timeline.



Next steps

We are not lenders, but we work with local lenders who handle renovation loans and can tell you whether a specific property is a good fit. Call us at (208) 267-2100 or send us a note on our contact page.