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Remodel and rehab loans are mortgage programs for home renovation. They allow homeowners and home buyers to finance the purchase or refinance a home, in combination with the renovation, through a single mortgage. These programs allow homeowners or home buyers to borrow based on the home’s expected value after the renovations are completed.

There are many different kinds of remodel and rehab loans. Certain types of loans are better for refinancing or buying older properties and some are better for purchasing a foreclosed property.

Most Common Types of Remodel & Rehab Loans

FHA 203(k): This federal program allows home buyers and homeowners up to $35,000 of financing into their mortgage for repairs or home improvements and upgrades. This is a great way to build equity and update your home. Because the mortgage is insured by the FHA, the qualifications are more lenient for those who don’t necessarily have a lot of cash on-hand for a down payment. This home loan program may be great for home buyers looking to make needed repairs identified by a home inspector or appraiser. FHA 203(k) home loans can also be beneficial for homeowners who need to make improvements in order to prepare their home for sale.

HomeStyle® Renovation Mortgage: Fannie Mae’s HomeStyle program is similar to the FHA 203(k) home loan, as it’s a way to allow borrowers to include home improvement financing into their purchase or refinance. The repairs or renovations can total up to 50% of the completed appraised value of the property with a first mortgage.


Benefits of Remodel & Rehab Loans

  • Can be a cost-effective way to repair or renovate your home.

Remodel and rehab loan programs help buyers cover the cost of purchasing a home in need of repairs or the cost of rehabilitating a property.
  • These loans are also used for refinancing existing mortgages, plus the costs of renovations.
  • Loan amounts are based on the home value after the renovations are completed.
  • Rehab loans can be a good tool for those who want to buy foreclosed homes that need repair.


A remodel or rehab loan could be a great opportunity in the competitive real estate markets of Portland and Vancouver, as well as the greater areas of Oregon, Washington, and California. Whatever your remodel or rehab goals, we have the tools and resources to identify which loan option is best for you. We are licensed in all three states and can help lay out your options. Find out if a remodel or rehab loan is the right next step for you. Contact us to discuss your eligibility and guidelines today.


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