Renovation Loan Resources

Renovation Loan Process

Found your dream home, but it requires a little extra work? If your heart is set on a fixer-upper but you don’t have the savings to cover both a down payment and a renovation, a renovation loan might be the best route for you. Click through the five steps below to learn more about the process to obtain a loan for the fixer-upper of your dreams.

Step 1

Within the first 14 days after submitting your application, we’ll work closely to obtain all documentation, ensure its complete and accurate, and submit it to loan processing for review.

At this time, you should also have your Housing and Urban Development (HUD) consultant inspection (if required) and obtain any contractor estimates for the work you wish to include in your renovation loan. We only need one estimate from the contractor you wish to work with. You can work with up to three separate contractors. For example: plumber, carpenter, electrician.

Step 2

Within 24 hours, a loan processor will review your documentation. After submitting a completed review in 48 hours, the processor will submit the loan to underwriting.

At this time, you should have received your final contractor estimate(s) and consultant report (if applicable). Once these items are received, we will order your appraisal and finalize your loan amount, monthly principle, and interest payment.

Once the final bid is placed, we begin working with your contractor on their validation package. This includes license (if applicable), insurance, and reference information. Once the contractor package is complete, it will be sent for your signature and review.

Step 3

Your loan will be assigned to an underwriter who will complete an initial review within 24 hours. The underwriter will also review your appraisal to determine if any additional repairs need to be added to your renovation project.

Our contractor validation team will also review the contractor’s license, insurance, and references. If any conditions are required, your loan will be sent back to the processor to clear them and prepare for closing.

Step 4

The underwriter will issue a clear to close (CTC) and assign the loan back to the processor. The processor will inform all parties of the CTC, verify the closing date and time, and place the loan in the closing queue. The closer will have 24 hours to provide closing documentation to the settlement agent.

Step 5

You’ll attend the closing with your agent and sign all remaining documentation.

Congratulations, your renovation loan is complete! Happy building!

Loan Types

  • Requires a HUD consultant who inspects the property, consults on the repairs and the associated costs, manages the project and provides a work write-up
  • Minimum repair amount of $5,000 with no maximum cost
  • Finances all eligible renovations included in the Streamline 203(k) plus certain structural alterations and major reconstructions such as:
    • Upgrading garages, bathrooms and kitchens (including new appliances)
    • Removal of health and safety hazards
    • Landscaping and other aesthetic improvements
    • Installation of wells or septic systems
    • Handicapped accessibility alterations

Eligible vs. Ineligible Borrowers

  • U.S. citizens
  • Permanent resident aliens
  • Qualified non-profit organizations
  • State and local government agencies

  • Foreign nationals
  • Corporations or limited liability companies (LLCs)

Eligible vs. Ineligible Properties

The property must have been completed for at least one year.

  • 1 to 4-unit attached and detached single family residences and planned unit developments
  • FHA-approved condos
  • Mixed-use developments (conditions apply)
  • Modular homes

  • Cooperatives
  • New construction
  • Manufactured homes
  • Properties with non-conforming construction that cannot be remedied
* Homes must be occupied by the owner. No second homes or investment properties. Transaction must be a purchase loan or refinance. Identity of interest (buying from a relative or business partner) is not permitted. Loans are subject to certain appraisal and construction requirements.

Renovation Loan Checklist

While you’re envisioning all the new appliances, sparkling new granite countertops, and fresh paint colors, the appraiser that evaluates your new home is inspecting certain things to ensure they meet HUD’s minimum property standards. Follow this checklist ahead of time to determine if these items need to be included in your repair list.

  • Exposed wiring
  • Chipped/peeling paint
  • Mold or mildew
  • Termite treatment
  • Windows open/close freely
  • Missing window screens
  • Inadequate caulking or weather-stripping
  • Missing electrical switches, outlets, or plates
  • Missing flooring or tiles
  • Damaged flooring
  • Missing built-in appliances
  • Missing bathroom fixtures
  • Water damage/water or dampness in basement
  • Missing handrails (3+ steps)
  • Remaining life of roof
  • Missing gutters
  • Soffit/fascia/siding damage
  • Utilities operational
  • Well/septic damage
  • Water heater (relief valve and proper strapping)

Home Renovation Guide

Our free guide to renovation loans provides all the information you need to understand the different financing options and requirements when considering home renovations.