Out here, the perfect move-in-ready home is hard to find — but a solid home that just needs updating is a lot easier. A renovation loan lets you buy that home and roll the remodel into one mortgage, based on what it'll be worth after the work is done. Here's how FHA 203(k) and HomeStyle really work, from a White Mountains broker who shops 100+ lenders.
A renovation loan lets you buy a home and finance the improvements in one shot — or renovate the home you already own — by rolling the project cost into the mortgage based on the home's after-renovation value. That's the key: instead of being capped at what the home is worth today, you can borrow against what it'll be worth once the work is done. So you don't need a separate construction loan, a second closing, or a pile of cash for the remodel.
The two workhorses are the FHA 203(k) and Fannie Mae HomeStyle, and there are others. Which one fits depends on the property, the project, and you.
Both do the same core job, but they fit different situations. The FHA 203(k) is government-backed, with a low down payment and more flexible credit qualifying — great for first-timers and buyers who want the lowest barrier to entry. It comes with FHA mortgage insurance and somewhat tighter property rules. There's a Limited 203(k) for smaller cosmetic projects and a Standard 203(k) for larger structural work.
HomeStyle is the conventional option. It can be used on primary homes, second homes, and even investment properties, allows a wider range of improvements (including some luxury items), and can drop mortgage insurance once you've built enough equity. Because I'm a broker, I compare both across 100+ lenders and match you to the one that actually fits your project — not just the single renovation product a bank happens to sell.
Across Show Low, Pinetop-Lakeside, Snowflake, Taylor, Heber-Overgaard, Springerville, and Eagar, a lot of the housing stock is older cabins and homes with great bones that just haven't been updated. Move-in-ready and perfect is rare; solid-but-dated is everywhere. A renovation loan turns those homes into opportunities — you get into a good property at a good price and make it yours, all financed together. It's also a smart play for owners who love where they live and would rather remodel than go through the hassle of finding and buying somewhere new.
Renovation loans cover a wide range: kitchens and baths, roofing, flooring, HVAC and systems, windows, additions, structural repairs, and accessibility upgrades — HomeStyle even allows some luxury items. What's eligible depends on the specific program, and certain projects require a licensed contractor and permits. I'll walk you through exactly what your project qualifies for before you commit a dollar.
Renovation loans have more moving parts than a plain purchase, and I'll be upfront about them. You'll gather contractor bids so we know the real cost. The appraisal is based on the after-improvement value from your plans, not the home's current condition. The renovation money is held and released to your contractor in stages called draws as the work is completed and inspected — not handed over at closing. And larger projects may involve a consultant. It's a few extra steps, but each one protects you, because you never pay for work that hasn't been done. Any dollar figures we discuss are illustrative until we run your real project.
You don't have to be buying. A renovation refinance lets you upgrade the home you already own by rolling the project cost into a new loan based on the after-renovation value. Before you go that route, I'll run it straight against your other options — a cash-out refinance or a HELOC might be simpler depending on your equity and goals — and tell you honestly which one gets you there for less.
Renovation loans are one of the programs where few lenders do them smoothly, and the details matter. I match you to the right program for your project, coordinate the bids, the after-value appraisal, and the draws, and manage it so the purchase and the remodel close together — instead of two loans and two closings. And as a broker who lives here and is also a licensed Realtor, I understand both the homes and the deals in a way an out-of-town lender doesn't. Let's talk through what you want to do.
Construction & One-Time-Close → · Purchase Loans → · Manufactured & Modular Home Loans →
A government-backed renovation loan that lets you buy a home and finance the improvements in one loan, or refinance and renovate the home you already own. The loan amount is based on the home's value after the renovation, so you can borrow more than the current price to cover the work. There's a Limited 203(k) for smaller cosmetic projects and a Standard 203(k) for larger structural work, with FHA's low down payment and flexible credit.
Both roll renovation costs into one mortgage based on the after-improvement value. FHA 203(k) is government-backed with a low down payment and flexible credit, but carries FHA mortgage insurance and tighter property rules. HomeStyle is conventional — usable on primary, second, and investment homes, allows a wider range of improvements, and can drop mortgage insurance once you have enough equity. I compare both and match you to the fit.
Yes — that's exactly what it's built for. You buy a dated home with good bones and finance the updates in the same loan, so you don't need a separate construction loan or cash for the remodel. It's especially handy in the White Mountains, where move-in-ready is hard to find but solid-but-dated homes are everywhere. The purchase and the remodel close together.
Kitchens and baths, roofing, flooring, HVAC and systems, windows, additions, structural repairs, accessibility upgrades, and more — HomeStyle even allows some luxury items. What's eligible depends on the program, and certain projects require a licensed contractor and permits. I'll walk you through what your project qualifies for before you commit.
The renovation funds are held and released to your contractor in stages called draws as the work is completed and inspected — not handed to you at closing. You'll provide contractor bids up front, the appraisal is based on the after-improvement value, and larger projects may involve a consultant. It's a few extra steps, but it protects you from paying for work that isn't done.
Yes. A renovation refinance lets you upgrade the home you own by rolling the project cost into a new mortgage based on the after-renovation value. It's common for owners who'd rather renovate than move — especially out here. I'll run it straight against a cash-out refinance or a HELOC and tell you which option gets you there for less.
Get pre-approved so you know your renovation budget before you make an offer — or just ask me a question. I'll give you the honest version, extra steps and all. Equal Housing Opportunity.