Who’s a Good Fit for Renovation
Buyers looking at a house that needs work, and homeowners who want the rehab inside the first mortgage instead of a separate project loan. If a simple purchase plus a HELOC is cleaner, we say so.
How a purchase works
You add the purchase price and the contractor bid. That combined figure is what the loan is based on, then we compare it to the as-completed appraisal (what the house is worth after the work). Your down payment is on that combined figure, not just the sticker price. On FHA, that can be 3.5% of that number. Other programs have their own minimums. I won’t print a chart.
The contractor does not get a lump check at closing. The rehab money is held and paid in draws as the work is inspected.
How a refinance works
Same idea if you already own the house. Conventional HomeStyle, FHA 203(k), VA, and jumbo renovation can put the rehab into the first mortgage. An escrow holdback is different: smaller leftover work after close, money held, then released when it’s done. Not a full renovation loan.
Common questions
- Can I do this with FHA or VA?
- Yes, if you’ll live in the house. Conventional and jumbo can also be a second home or a rental, depending on the file.
- Is this a construction loan?
- No. Ground-up construction is a different conversation.
- Do I pick the contractor?
- Yes. Licensed, insured, and the bid has to be something the program can actually fund.
What I need from you
The property and whether this is a purchase or a refinance. Then we apply. The contractor bid comes after we apply, not as homework before it. Talk to me first if you want a second set of eyes on which box fits.