– Renovation Loans allow you to finance both the purchase price of the home and the cost of renovations all in one loan. Financing your renovations into your mortgage means you don’t have to come up with all the cash needed for every repair and remodel cost involved in transforming your home.
Renovation costs (between $15,000 – $35,000 max) are wrapped into the mortgage as a single loan; the total loan amount is typically equal to the purchase price plus the total estimated cost of repairs.
Can You Add Renovations to a Mortgage When Purchasing. – The loan amount is based on the after-repair value of the home. You can buy a one- to four-family home with a 203(k) loan. You can also buy a condo with one of these loans as long as no more than 25 percent of the condos in the complex are currently being financed and refurbished with FHA loans.