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When shopping for a home, you may come across properties that aren’t quite what you’re looking for but have the potential to be your dream home with some repairs or renovations. With a renovation loan, you can roll the cost of financing or refinancing a home and repairs into one loan – saving you time and money.

The goal is to allow neighborhood revitalization and greater homeownership opportunities. This loan covers not only the cost of the property but also the cost of necessary home repairs. The remodeling funds include parts and labor and the work must be performed by a licensed General Contractor.

Qualifying for a Renovation Loan

In order to qualify, homeowners must plan to live in the home they are repairing. The following types of residences qualify:

  • Existing construction that is at least a year old.
  • Single-family, two-family, three-family or four-family dwellings.
  • Condos, if they have been approved for FHA loans.
  • Buyer must have a minimum credit score of 640

What Types of Repairs Qualify?

There are specific guidelines as to which types of repairs qualify for renovation loans. The lender will also stipulate which repairs you can make. As long as the repairs are not structural, allowable repairs may include:

  • Disability access
  • Heating, ventilation and air conditioning
  • Plumbing
  • Kitchen or bathroom remodeling
  • ….and more!


To learn more about renovation loans and see if this is the best option for you, please see the frequently asked questions below.

  1. HomeStyle Renovation Loans
  2. Limited 203(k) Rehabilitation Mortgages
  3. Standard 203(k) Rehabilitation Mortgages

You can use a HomeStyle renovation loan to cover costs of repairs, remodels, renovations or energy-efficient improvements on a primary residence, a second home or an investment property. There are no required improvements or restrictions on the types of repairs allowed or a minimum dollar amount for the repairs. However, repairs or improvements must be permanently affixed to the real property, add value to the property, and be completed by a licensed contractor.

In addition to funding your new home, an FHA Limited 203(k) can provide up to $35,000 (including a contingency reserve) in additional funds to help make a few non-structural repairs or renovations such as updating a kitchen or bathroom, adding new flooring, purchasing new appliances, or repairing the roof.

If your potential dream home needs more than $35,000 in renovations or the repairs are structural, the Standard FHA 203(k) might be the right solution. This program removes the restrictions of the limited option to allow for major home remodeling. A Standard FHA 203(k) can provide additional funds* to help with eligible repairs including moving or removing walls, minor pool repairs, and landscaping.
*Final disbursement of funds is subject to final inspection.

The loan experts at Fairway Independent Mortgage Corporation in Grand Junction want you to be able to renovate your house with minimal stress. Contact us today and we will guide you through the application process for a renovation loan.


Request an appointment with our loan experts to get started withFairway Independent Mortgage Corporation today.

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