Whether you’re buying a home that needs work or improving the one you already own, the biggest question is usually: how will you pay for it? That’s where a renovation loan comes in.
At Drennen Home Loans, we help Las Vegas homeowners use renovation loans to update kitchens, repair roofs, remodel bathrooms, or even make major structural upgrades — all rolled into one simple mortgage.
Here’s what you need to know about how renovation loans work, and how they could help you tackle your next home improvement project.
What Is a Renovation Loan?
A renovation loan is a type of mortgage that allows you to finance both the cost of the home and the cost of repairs or upgrades in a single loan.
These loans are especially useful for:
- Buyers purchasing a fixer-upper
- Homeowners wanting to modernize without refinancing separately
People who don’t want to drain their savings for remodeling
FHA 203(k) Loan
A government-backed loan that lets buyers or owners finance renovation costs with flexible guidelines.
- Includes both standard and limited versions
- Minimum 3.5% down payment
- Great for first-time buyers and older homes
- Can be used for structural and cosmetic repairs
Fannie Mae HomeStyle® Renovation Loan
A conventional loan that allows for a wide range of improvements, including luxury upgrades.
- Used for primary, secondary, or investment properties
- Down payments as low as 5%
- Allows for things like pools, landscaping, and more
- Higher credit score requirements than FHA
VA Renovation Loan
Available for eligible veterans and service members using their VA loan benefit.
- Finance up to 100% of the home’s value + renovation
- Must meet VA appraisal standards
- Good for moderate improvements (not major structural work)
What Can a Renovation Loan Be Used For?
Renovation loans are flexible and can cover projects like:
- Kitchen and bathroom remodels
- Roof or window replacement
- HVAC upgrades
- Flooring and interior updates
- Electrical and plumbing work
- Adding a garage, deck, or room extension
- Energy efficiency improvements
- Accessibility modifications
Important: All renovations must add value and be completed by licensed contractors.
Benefits of Using a Renovation Loan
- One loan, one monthly payment
You don’t need to juggle a mortgage and a personal loan or credit card.
- Low interest rates compared to credit-based loans
You get mortgage-level rates, not high-interest personal loan rates.
- Increased home value
Many renovations increase your property’s resale value and livability.
- Get into better neighborhoods for less
Buy a lower-priced fixer in a great area and build it into your dream home.
Who Should Consider a Renovation Loan?
- Homebuyers who find the “perfect location, not-so-perfect house”
- Homeowners who don’t want to refinance their current low rate
- Veterans looking to make improvements without upfront cash
- Investors and second-home buyers (for HomeStyle Loans)
Renovation Loan Process (Step-by-Step)
- Get pre-approved to determine your budget and loan program
- Choose a licensed contractor and get bids for the work
- Appraisal is done based on future/improved value
- Loan is approved and closed
- Funds are held in escrow and disbursed as work is completed
- Contractor completes the project under agreed timelines
- Final inspection ensures everything is completed properly
Common Challenges — and How We Help
“What if I don’t know which loan to choose?”
We walk you through each option and match you with the best fit for your budget and project scope.
“What if I don’t have a contractor yet?”
We can connect you with local, licensed pros who meet program requirements.
“Is it more paperwork?”
Yes — renovation loans do involve more steps, but we handle most of the process for you.
Frequently Asked Questions
Can I DIY the renovations?
No — most renovation loan programs require the use of licensed contractors.
How much can I borrow?
You can typically borrow up to 110% of the projected value of the home after improvements (depending on the program).
What credit score do I need?
- FHA 203(k): 580+
- HomeStyle: 620+
- VA Renovation: Typically 620+, with flexible options
Can I live in the home during renovations?
In most cases, yes — though it depends on the scope of the work.
Why Work With Drennen Home Loans?
- We specialize in renovation and construction loans
- We guide you through contractor selection and document submission
- We help calculate post-renovation home value for strategic upgrades
- We’re based in Las Vegas and understand the local housing market
- We stay with you through the entire project timeline
Turn Your Current or Future Home Into Your Dream Home
A renovation loan could be the key to unlocking the upgrades you’ve been dreaming about — without draining your savings. Let’s see what’s possible together.
