Renovation Loan Basics

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Renovation Loan Guest Blog
Todd Miles

Written by Guest Writer Todd Miles, Evergreen Homes Regional Manager 

Most people have things about their home, or a home they want to purchase, that they absolutely love. From the perfect backyard to an amazing kitchen, we are obsessed with different parts of our homes. But often, there are also those areas that need some work. Pink tile in the bathroom? A galley kitchen that is closed off from the living room? A roof that leaks? From aesthetic to structural, there are often things that need to be changed through a renovation.

But as with most construction, renovations can be pricey. You need to find a trusted contractor, purchase supplies, obtain needed permits and maybe even contract with architects or engineers. For many renovations, a renovation loan can finance your improvements or repairs in one mortgage inclusive of the home loan and renovation costs.

To qualify for a renovation loan, properties must be a single-family, two-family, three-family or four-family dwelling that is at least a year old. Mixed-use properties are eligible if the renovations are solely on the home portion of the property and condos qualify if they are approved for FHA loans. Some of the actions you can take with renovation financing on an eligible property includes:

  • Purchase a home that you would like to renovate
  • Purchase a home with the intent of moving it to a new location and foundation
  • Refinance an existing mortgage to allow for renovation expenditures
  • Convert a single-family dwelling into a two-, three-, or four-family dwelling
  • Decrease an existing multi-unit dwelling

For the renovation and repair stage, a partial list of repairs that qualify include:

  • Structural alterations and reconstruction
  • Modernization and improvements to the home’s function (updated kitchens, bathrooms, basements, etc.)
  • Changes that improve appearance
  • Reconditioning or replacing plumbing
  • Installing a well and/or septic system
  • Adding or replacing roofing, gutters and downspouts
  • Adding or replacing flooring
  • Major landscape work and site improvements
  • Energy conservation improvements

If you’re thinking of making renovations to your home, or purchasing a home for renovation, make sure you engage a home loan professional as a part of your research and discussion. They can discuss your financing options and help guide you through the process.

Want to write for BBB Northwest? Contact Managing Editor Veronica Craker at 206-676-4105 or email her at veronica.craker@thebbb.org for a chance to be a featured writer on this blog.

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