Why Consider a Fixer-Upper?

In competitive markets, move-in-ready homes can be hard to find and often come with higher price tags. A home that needs updates may offer several advantages:

• Lower purchase price
• Less competition from other buyers
• Opportunity to customize the home to your style
• Potential for increased property value after renovations

The key is having the right financing in place to cover both the purchase and the improvements.

Renovation Loans: Two Popular Options

Renovation loans combine the cost of buying a home with the funds needed to repair or update it, all within a single mortgage. Two of the most widely used programs include:

FHA 203(k) Loan

This government-backed loan is designed to help buyers purchase homes that need repairs or upgrades. The FHA 203(k) program allows borrowers to finance both the home purchase and renovation costs together, which can make it easier to afford improvements without taking out separate loans.

This option is especially helpful for buyers who may benefit from more flexible credit guidelines or lower down payment requirements.

Fannie Mae HomeStyle® Renovation Loan

The HomeStyle® loan is another popular option that allows buyers to finance renovations as part of their mortgage. It offers flexibility in the types of improvements that can be included, from structural repairs to cosmetic upgrades like kitchens, bathrooms, and flooring.

Because this loan is based on the home’s after-renovation value, buyers may be able to finance projects that significantly enhance the property’s long-term worth.

What Can Renovation Loans Cover?

Depending on the program and project scope, renovation loans can help finance a wide variety of improvements, including:

• Kitchen or bathroom remodels
• Roof replacement or structural repairs
• New flooring or updated fixtures
• Energy-efficient upgrades
• Accessibility improvements
• Room additions or layout changes

Rather than living with outdated spaces or paying for renovations out of pocket, you can roll the cost of improvements into your mortgage from the start.

Steps to Get Started

If you’re considering a fixer-upper this spring, here’s how the renovation loan process typically works:

1. Find the Right Property

Work with your real estate agent to identify homes with potential. Even properties that need noticeable updates may become excellent long-term investments.

2. Plan the Renovations

You’ll work with contractors to estimate the cost of improvements and determine what changes you want to make.

3. Secure Renovation Financing

A Consumers National Bank Lender will review the purchase price, renovation plans, and projected after-improvement value to structure the loan.

4. Transform the Home

Once the loan closes, renovation funds are distributed during the construction process so your project can move forward smoothly.

Turn Potential into Possibility

Sometimes the best home isn’t the one that’s perfect today, it’s the one that has the potential to become exactly what you want. Renovation loans give buyers the flexibility to see beyond cosmetic issues and focus on what a home can become.

If you’re exploring homes this spring and wondering whether a fixer-upper could be the right move, the mortgage team at Consumers National Bank is here to help. We’ll walk you through renovation loan options, explain the process, and help you determine what fits your homeownership goals.

Ready to turn a “maybe” house into your dream home? Connect with a Consumers National Bank mortgage lender or contact us today and start exploring renovation financing options designed to help you build the home and the future you envision!