A renovation loan lets you buy a home and pay for repairs or upgrades with a single loan, borrowing based on what the home will be worth once the work is done.
Mountain Country Mortgage compares renovation lenders on your behalf, so Northern Arizona buyers can take on a fixer-upper without draining their savings.
A renovation loan combines the purchase price of a home with the estimated cost of repairs or upgrades into one loan and one closing. The lender holds renovation funds in escrow, releasing them to your contractor as work is completed.
Common programs include FHA 203(k), Fannie Mae HomeStyle, and Freddie Mac CHOICERenovation, each with its own guidelines. A renovation loan is not the same as a home equity loan or a personal home improvement loan.
Mountain Country Mortgage is a broker, not a lender. We compare renovation programs across our lender network to fit your project, your budget, and your timeline.
Northern Arizona has real older housing stock, especially in established neighborhoods, where move-in-ready inventory is limited and competition for updated homes runs high.
Buyers in competitive markets often lose out on the few move-in-ready homes available. A renovation loan opens up a much wider set of listings by financing the fix along with the purchase.
A buyer in Flagstaff found an older home in an established neighborhood that needed a new roof and a kitchen update. A renovation loan combined the purchase and the improvements into one loan, letting them close before a competing cash offer came in.
| Requirement | Typical Range |
|---|---|
| Minimum Credit Score | Varies by program. FHA-backed options often start at 580; conventional programs typically ask for 620 or higher. |
| Down Payment | Varies by program. FHA-backed options can start at 3.5%. |
| Renovation Documentation | Contractor bids and an after-improved appraisal are required. |
| Contractor Requirement | Licensed contractors are required in most programs. |
| Occupancy | Primary residence required for most programs. |
| Renovation Scope | Must meet the specific program’s guidelines. |
Requirements vary by program, so we help you find the one that fits your score.
We review your renovation plans alongside your finances to structure the loan.
Get a licensed contractor's bid before you finalize your offer.
We manage the file as the lender reviews the purchase price and renovation scope together.
Funds are held in escrow and released to your contractor as work is completed.
A couple of quick stops before you go further, so you walk into your first conversation with a loan officer already prepared.
A plain-English walkthrough of the whole process, from checking your credit to closing day.
See every loan program Mountain Country Mortgage offers, from first-time buyer options to investor financing.
Most programs cover a wide range of improvements.
Roofing, plumbing, electrical, HVAC, flooring, kitchen and bath remodels, structural repairs, and energy-efficiency upgrades are all common. Luxury additions like pools are usually excluded from FHA limited programs but may be allowed under other renovation options.
The contractor must be licensed and, depending on the program, lender-approved.
You typically cannot do the work yourself under these programs. Your loan officer will clarify the contractor requirements for the program you choose.
Yes.
Renovation loans can refinance an existing mortgage and add funds for improvements at the same time, which can be a good option for homeowners who want to update their current home without taking on a second loan.
Most programs set a completion deadline, typically six months from closing.
The exact timeframe depends on the scope of work and the specific loan program. Your loan officer will outline the timeline requirements before you apply.
You can build a contingency reserve into the loan, usually 10 to 20 percent of the renovation budget.
If the project comes in under budget, remaining funds may be applied to your loan balance or returned, depending on the program.
No.
A renovation loan improves an existing structure. A construction loan builds a new home from the ground up. If you are starting with a vacant lot or tearing down to rebuild, a construction loan is the right fit.
No.
A home equity loan taps equity in a home you already own and closed on separately. A renovation loan combines the purchase and the renovation into one loan and one closing, before you even own the home.