Renovation Loans in Texas
Move-in ready homes go fast, and many of the homes for sale in Texas need some work. A renovation loan lets you buy the house and pay for the repairs in one loan with one monthly payment. You can look at homes other buyers pass over and turn one into the home you want. Renovation loans are one of my specialties, and I'll guide you from the first contractor bid to the last repair.
Renovation Loan Options
Works with lower credit scores and covers small fixes up to major repairs.
A conventional option that can cover repairs and upgrades, even a new pool.
A conventional option that can also pay for upgrades that protect against storms.
Lets eligible veterans buy and repair a home with zero down.
Zero down for homes in eligible areas, with repairs built into the loan.
Keeping a Home in the Family
One of my clients bought their grandparents' house so it would stay in the family. The home was full of memories, but it hadn't been updated in years. We used an FHA 203(k) renovation loan with a gift of equity. That means the grandparents sold the home for less than it was worth, and the difference counted as the down payment. The loan also covered the updates: a new kitchen and bathrooms, fresh paint and new flooring throughout, and new windows. Now the home their family loved is comfortable for how they live today.
Things to Know
The loan amount is based on what the home will be worth after the repairs. You'll need a written bid from a licensed contractor before closing. The repair money goes into a separate account and is paid to the contractor in stages as the work gets done. Most programs set a deadline for finishing the work, and extensions are possible. Renovation loans take a little more planning than a regular loan, so we'll start early and keep your project on track.
Common Questions
How does a renovation loan work?
You get one loan that covers the price of the home plus the cost of the repairs. The appraiser values the home as if the work is already done. After closing, the repair money is paid to your contractor in stages as each part of the job is finished.Which renovation loan is right for me?
It depends on your credit, your down payment, the size of the project, and whether you qualify for VA or USDA. An FHA 203(k) is often a good fit for lower credit scores, and HomeStyle or CHOICERenovation can work well for stronger credit or bigger upgrades. I'll compare them side by side for your home.How much can I borrow for repairs?
It depends on the program and the home's value after the work is done. The FHA 203(k) Limited covers up to $75,000 in repairs that aren't structural. The Standard 203(k) and the conventional options can cover larger projects, including structural work.Can I do the work myself?
In most cases, no. Lenders require a licensed contractor so the work is done right and on time. You can still choose the contractor and help plan the project.Can I use a renovation loan on the home I already own?
Yes. You can refinance into a renovation loan to pay for repairs or updates on your current home, as long as you have enough equity once the work is done.Can I buy a home from a family member with a renovation loan?
Yes. If a family member sells you their home for less than it's worth, the difference can count as your down payment. This is called a gift of equity. It works with FHA and conventional loans, and you can still add the repairs into the same loan. The family member signs a gift letter, and the home is appraised like any other purchase.
Want every step in one place?
My free guide walks you through the whole process, from your first call to closing day.
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This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval.
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