Unlocking the Potential of Your Fixer-Upper with Suitable Loan Options

Thinking about buying a home that needs repairs or updates? A renovation loan may allow you to purchase the property and finance eligible improvements with a single mortgage. Whether you're restoring an older home, updating outdated features, or making necessary repairs, The Polder Group at CrossCountry Mortgage can help you explore renovation financing options available to qualified borrowers.

Three of the most popular renovation loan options include the FHA Limited (Streamline) 203(k), FHA Standard (Full) 203(k), and Fannie Mae HomeStyle® Renovation Loan. Each program is designed for different renovation needs and property types.

FHA Limited (Streamline) 203(k) Loan

The FHA Limited 203(k), formerly known as the Streamline 203(k), is a government-backed renovation loan designed for homes that need non-structural repairs. Eligible borrowers may finance up to $35,000 in qualifying renovations as part of their mortgage.

Common eligible improvements may include:

• Lead-based paint or mold remediation
• Kitchen and bathroom remodeling (non-structural)
• Decks, patios, porches, fences, walkways, and driveways
• New flooring, carpeting, and select appliances
• Window, door, and siding replacement
• Plumbing, electrical, and HVAC repairs or upgrades
• Roof, gutter, and downspout replacement
• Accessibility improvements for occupants with mobility needs

This loan can be an excellent option for buyers looking to improve the condition of a home without major structural work.

FHA Standard (Full) 203(k) Loan

For larger renovation projects, the FHA Standard 203(k) loan offers greater flexibility. This program is designed for homes requiring structural repairs or renovations that exceed the Limited 203(k) repair limits.

A HUD-approved consultant is required to help oversee the renovation process, prepare documentation, and coordinate with contractors before the appraisal is completed.

Eligible improvements may include:

• Room additions or structural alterations
• Load-bearing wall modifications
• Minor foundation repairs
• Extensive grading, drainage, and landscaping improvements
• Repairs for structural termite or pest damage

The FHA Standard 203(k) can help transform homes needing significant rehabilitation while financing both the purchase and renovation costs into one loan.

Fannie Mae HomeStyle® Renovation Loan

The Fannie Mae HomeStyle Renovation Loan is a conventional financing option available for eligible primary residences, second homes, and investment properties. It offers flexibility for a wide variety of renovation projects, including upgrades that are not permitted under FHA renovation programs.

Potential eligible improvements include:

• Detached garages, pool houses, or accessory dwelling units (ADUs)
• Outdoor kitchens, fireplaces, built-in grills, and swimming pools
• Completing unfinished work on newly constructed homes that are at least 90% complete
• Cosmetic and structural improvements, depending on program guidelines

Because HomeStyle is a conventional loan, qualification requirements may differ from FHA renovation financing.

Which Renovation Loan Is Right for You?

Choosing the best renovation loan depends on several factors, including:

• The condition of the property
• The estimated cost of renovations
• Whether structural repairs are needed
• Your occupancy plans (primary residence, second home, or investment property)
• Your financial qualifications and loan eligibility

An experienced mortgage professional can help determine which renovation financing option best fits your goals.

If you're just beginning your homebuying journey, visit our Buy a Home page:
https://www.thepoldergroup.com/buy

You can also learn more about our available Renovation Loan options:
https://www.thepoldergroup.com/renovation-loan

Frequently Asked Questions

Can renovation costs be included in my mortgage?

Depending on the loan program and your eligibility, renovation costs may be financed into the mortgage rather than paid separately.

Can I use a renovation loan for an investment property?

The Fannie Mae HomeStyle Renovation Loan may be available for eligible investment properties, while FHA 203(k) loans are generally intended for owner-occupied homes.

Do I need contractors?

Most renovation loan programs require licensed contractors, and self-performed work is generally subject to program restrictions.

Ready to Explore Renovation Financing?

If you're considering purchasing a fixer-upper in Tucson or anywhere throughout Southern Arizona, The Polder Group at CrossCountry Mortgage can help you understand your renovation financing options and determine which loan program may fit your needs.

Contact our team today to discuss your home financing goals, get pre-approved, or learn more about renovation loans available to qualified borrowers.

Availability, eligibility, loan limits, and program guidelines are subject to change without notice. Contact a Mortgage Loan Originator for current program details.

The FHA Standard (Full) 203(k) product may be offered through an approved lender partner or broker channel. Availability, eligibility, and terms are subject to the requirements of the participating lender. Not all applicants will qualify. This is not a commitment to lend.

This article is for educational purposes only and does not constitute financial or mortgage advice. Loan programs, rates, and guidelines may change at any time. All loans are subject to credit approval and underwriting. For guidance tailored to your situation, consult a licensed mortgage professional.