| How It Works
A Renovation Loan is just like a traditional mortgage that also includes additional money for renovation work. You can use the renovation money for a multitude of reasons, which generally fall into three categories:
- Obvious/Necessary Repairs — such as fixing/replacing a roof or furnace, plumbing & electrical issues, foundation work, etc.
- Desired Remodeling — such as updating the kitchen, bath, flooring, or exterior
- Major Remodeling – including gut/rehab projects, additions, or adding a garage
There are a variety of renovation loans including FHA, Conventional, VA and USDA choices. You can do as little or as much remodeling as you’d like. The type of loan, your budget, and what the neighborhood values will support are also factors in how big or small of a project you can take on. The loans are mortgages with one loan, one closing and one payment. All loans close with the house in ‘as-is’ condition. The money for renovations is escrowed at closing. After closing, work begins and your contractor is paid as work progresses. When the work is completed, you have a house you can truly call your own!
The pages in this section will help you understand the nuances to the process, including the typical path you’ll travel, the pre-approval process, and contractor selection tips. We also have a list of our most often-asked questions and answers to help you get a fuller understanding of the process.
Want to get pre-approved? Click the button below to go to the PrimeLending website, where you can start the application process.