Contractor eligibility is critical
Contractor eligibility and documentation are critical.
Finance the home and the work
Renovation and Construction Loan Options
Renovation and construction loans can combine eligible acquisition or refinance financing with funds for approved improvements. These transactions require more planning than a standard mortgage because the scope, contractor, budget, appraisal and draw process become part of the loan.
✓Purchase-plus-renovation structures may be available✓After-improved value can be considered✓Programs for minor upgrades through substantial projects✓One-time-close construction options may exist
Who may benefit
Start with fit—not a loan label.
The strongest option depends on the complete financial profile, desired payment, property and plans for the future.
✓
Buyers considering a property that needs work
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Homeowners planning qualifying improvements
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Borrowers building an eligible primary home
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Realtors working with condition-challenged listings
Plan with the full picture
Important considerations
RFG compares eligible paths and explains the tradeoffs so the decision is based on more than a headline feature.
Contingency reserves are commonly required
Contingency reserves are commonly required.
Funds are released through controlled draws
Funds are generally released through controlled draws.
Build extra time into the timeline
Timelines should account for appraisal, bids and project review.
How RFG guides the process
From question to closing.
A disciplined process creates room for better decisions and fewer preventable surprises.
- 01
Define the project scope
- 02
Select an eligible contractor
- 03
Prepare bids, plans and timeline
- 04
Complete after-improved appraisal
- 05
Close and follow the draw process
Straight answers
Frequently asked questions
Every mortgage is specific to the borrower, property and current program requirements. These answers are educational starting points.
Can renovation costs be included in a mortgage?+
Eligible programs may finance approved renovation costs as part of a purchase or refinance, subject to scope, appraisal and underwriting requirements.
Can I do the work myself?+
Owner-performed work is restricted or unavailable under many programs. Contractor and self-help rules depend on the specific loan.
How are renovation funds released?+
Funds are typically held and released through draws after required inspections or completion milestones.
Authoritative referencesHUD 203(k) rehabilitation mortgage information ↗RFG links to primary sources for education. Program details must be confirmed for your transaction.
Mortgage information reviewed by Bart Rice, Founder & Managing Broker · NMLS #283336
Last reviewed August 5, 2026. This page provides general education. Loan programs, pricing, documentation and eligibility can change and must be confirmed for the borrower, property and transaction.