Home Loans
Rehab Loans
Buy and renovate with a single mortgage, turn a fixer-upper into your dream home.
Overview
What Is a Rehab Loan?
Rehab loans, including FHA 203(k) and Fannie Mae HomeStyle loans, let you finance both the purchase price of a home and the cost of renovations or repairs into a single mortgage. Instead of taking on a second loan or draining your savings for improvements, you borrow based on the home projected after-improved value. This makes it possible to buy a property that needs work and transform it into exactly what you want from day one.
Key Benefits
Why Choose This Program?
- ✓ Purchase and renovation in one closing
- ✓ Finance up to 95% of after improved value
- ✓ Lower rate than separate renovation loans
- ✓ Available for primary residences
- ✓ Energy efficient upgrades eligible
- ✓ No construction experience required
Requirements
What You’ll Need
- ✓ Minimum credit score: 620
- ✓ Down payment as low as 3.5% (FHA 203k)
- ✓ Detailed contractor bids and cost estimates
- ✓ Property must meet minimum standards after renovation
- ✓ Mortgage insurance may apply
- ✓ HUD-approved 203(k) consultant for standard loans
Who Should Choose This Loan?
Is a Rehab Loan Right for You?
- ✓ Buyers interested in fixer-uppers or distressed properties
- ✓ Homeowners who want to customize before moving in
- ✓ Borrowers with limited cash for separate renovation financing
- ✓ Buyers in markets where move-in ready homes are scarce or overpriced
Frequently Asked Questions
Rehab Loan FAQ
What is the difference between a 203(k) and HomeStyle loan?
The FHA 203(k) is government-insured with 3.5% down and a 580 minimum credit score. The Fannie HomeStyle is conventional, offering 3-5% down with a 620 minimum credit score and no upfront mortgage insurance.
How much can I borrow for renovations?
FHA 203(k) Limited allows up to $75,000 in renovations. The Standard 203(k) has no fixed cap but requires a HUD consultant. HomeStyle allows renovations up to 75% of the after-improved value.
Can I do the work myself?
Limited DIY is possible for some cosmetic work, but most renovations must be completed by licensed contractors to ensure quality and code compliance.
How long does the renovation process take?
Funds are disbursed as work is completed and inspected. Most renovations are finished within 6 months, depending on scope.
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Ready for a Rehab Loan?
Get a personalized rate quote and see how much you qualify for.