What are my renovation loan options?

Trying to find the loan option best-suited to your home renovation project? Here’s a guide to help you understand all of the different renovation loan options available.

Home renovation loans use the after renovation value of your home to determine how much you can borrow. This key factor makes them an attractive choice for many homeowners, because it often allows you to borrow more. Read more about how this works here

Each type of home renovation loan is best for different types of situations.

There are RenoFi loans, construction loans, Fannie Mae Homestyle loans, and FHA 203k loans. Each has different pros and cons, depending on your project. 

If you know you want to factor in your home’s after renovation value to get a loan for your home remodel, but you’re not sure which loan type might be best, compare the different renovation loan options available in the table below.

Renovation Home Equity LoanSingle-Close Construction To Permanent Loan (CTP)Fannie Mae HomeStyle LoanFHA 203k (Full)Two-Close Construction To Permanent Loan (CTP)
Is this a mortgage?YesYesYesYesYes
1st or 2nd mortgage?2nd1st1st1st1st
Require refinance of existing mortgage?NoYesYesYesYes
Typical Interest RateMarketAbove MarketAbove MarketAbove MarketAbove Market
Loan Limit (Renovation Cost + Mortgage)$500,000Jumbos allowedConforming only$Conforming onlyJumbos allowed
Loan Term (max)20 years30 years30 years30 years30 years
Credit Score Required660+700+620+580+580+
Loan to ValueUp to 95%Up to 95%Up to 95%Up to 96.5%Up to 80%
Can be used for building new home?NoYesNoNoYes
Restrictions on type of improvements?NoNoNoYesNo

Still not sure which loan option is right for you? Check out What is a Home Renovation Loan to get a more in-depth picture of each loan option.

How do I know if a RenoFi loan is right for my project?

The RenoFi team is standing by to help you better understand how RenoFi Loans work and the projects they are best suited for. Have a question - Chat, Email, Call now...