See a home with good bones but bad everything else? FHA 203(k) and conventional renovation loans let you finance the purchase price and the renovation costs in a single mortgage. One closing, one set of fees, and a home tailored to your vision.
The Treasure Valley's housing market is competitive. Move-in-ready homes in desirable neighborhoods get multiple offers. But homes that need work? They sit longer, attract fewer buyers, and often sell below their potential value. That's the opportunity.
A renovation loan lets you buy a property based on what it could be, not just what it is today. The appraisal is based on the after-renovation value, so you're borrowing against the finished product. You can compete for properties that other buyers are overlooking, pay less for the home itself, and finance the improvements that turn it into exactly what you want.
This works especially well in Boise's established neighborhoods like the North End, Warm Springs, and Southeast Boise, where older homes with character are priced below new construction but need updating. It also works for buyers who want to be in Eagle or Meridian but can't find new construction at their price point.
The right program depends on the scope of your renovation, your down payment, and whether you're buying a primary residence, second home, or investment property.
For major renovations exceeding $35,000. Covers structural work, room additions, full kitchen and bathroom remodels, and even razing and rebuilding on the existing foundation. Requires a HUD-approved consultant to oversee the project. As low as 3.5% down based on the total project cost (purchase price plus renovation). Primary residence only.
For renovations under $35,000. Cosmetic updates, new flooring, paint, appliance replacement, minor repairs, and non-structural improvements. No HUD consultant required, which simplifies the process and reduces costs. Same 3.5% minimum down payment. A strong option for homes that need a refresh but not a gut renovation.
Conventional renovation loan with no FHA mortgage insurance. Down payments start at 5% for primary residences. Unlike FHA, HomeStyle works for second homes and investment properties. No cap on renovation costs (within the conforming loan limit). Eligible improvements include luxury items like landscaping and outdoor living spaces that FHA typically excludes.
Similar to HomeStyle with its own set of guidelines. Available for primary residences, second homes, and investment properties. Includes a unique feature: financing for resilience improvements (storm shelters, flood barriers, fire-resistant materials) that can reduce long-term insurance costs. Down payments as low as 5%.
The process is more involved than a standard purchase because you're coordinating financing, contractors, and construction timelines. Here's how it works.
We discuss your budget, the type of property you're targeting, and the scope of renovation you're comfortable with. I'll pre-approve you for a total amount that includes both the purchase price and renovation costs, so you know exactly what you can work with.
Once you've found a property, your licensed contractor prepares detailed bids for the renovation work. These bids become part of your loan documentation. The total project cost (purchase price plus renovation) determines your loan amount.
The appraiser evaluates the property at its current as-is value and its projected after-renovation value based on the planned improvements. Your loan is underwritten against the after-renovation value. For FHA Standard 203(k), a HUD consultant reviews the plans and creates a work write-up.
You close on the loan. The purchase is funded, and renovation funds are placed in escrow. Your contractor begins work according to the approved plan and timeline.
As the contractor completes milestones, funds are released from escrow after inspections verify the work. This protects both you and the lender. Most renovations are completed within 3 to 6 months depending on scope.
A final inspection confirms all work is complete and meets the approved specifications. Any remaining escrow funds are released or applied to your loan balance. You move into a home that's exactly what you wanted.
Renovation loans cover a broad range of improvements. All work must be completed by a licensed contractor and must add value to the property.
I specialize in construction lending. Renovation loans have the same draw process and inspection requirements. My experience with new construction directly translates to smoother renovation loan management.
I work with contractors on bid formatting, draw scheduling, and inspection coordination. When your contractor has questions about the process, I'm the point of contact who actually understands what they're asking.
FHA Limited, FHA Standard, HomeStyle, CHOICERenovation. Each has different rules, costs, and eligible improvements. I match the right program to your specific project instead of defaulting to whatever's easiest to process.
Let's talk about whether a renovation loan makes sense for your project. I'll walk you through the programs, the numbers, and the process.