Buy or Refinance and Renovate With One Loan in Frisco, TX

One Loan for the Home and the Work

Most mortgages finance a home as it stands today. A renovation loan is different: it is based on what the home will be worth once the planned improvements are finished, and it includes the cost of that work in the loan. Instead of buying a home and then scrambling for a separate loan or credit card to cover repairs, you can handle both in one mortgage with one closing and one monthly payment.

That can open up homes other buyers pass on, or let you update the home you already love instead of moving. It is not a shortcut, though. Renovation loans come with more paperwork, more people involved, and more steps than a standard mortgage. Our job is to make those steps clear before you start, so there are no surprises halfway through a remodel.

How Renovation Loans Work

While each program has its own rules, renovation loans tend to follow the same general path:

• You define the project. You work with a qualified contractor to put together detailed bids that spell out the work and the cost.
• The lender reviews the plan. The bids, the contractor, and the scope of work are reviewed as part of the loan approval.
• The appraisal looks forward. The appraiser estimates the home's after-improved value, meaning what it should be worth once the work is complete.
• Renovation funds are held, not handed over. At closing, the money for the work is typically placed in an escrow account and released in stages as work is completed and inspected.
• The work has a timeline. Each program sets expectations for when work must start and finish, so planning ahead matters.

FHA 203(k) vs. Fannie Mae HomeStyle

Both programs combine a mortgage with renovation costs, but they are built for different situations.

FHA 203(k) is backed by the Federal Housing Administration. Like other FHA loans, it can allow a smaller down payment (FHA purchases can go as low as about 3.5% down for qualified buyers) and can be more flexible on credit history. It is designed for owner-occupants, meaning you plan to live in the home as your primary residence. It focuses on repairs and improvements that make a home safer, more functional, and more livable, and it comes in two types depending on the size of the project. FHA loans also carry mortgage insurance.

Fannie Mae HomeStyle is a conventional renovation loan. It generally suits borrowers with stronger credit and a bit more down, and it tends to be more flexible about the kind of improvements you can make. Depending on guidelines, it may be available for more than just a primary residence. Mortgage insurance may apply with a smaller down payment, and on a conventional loan it can often be removed later as you build equity.

Neither one is automatically better. The right choice depends on your qualifications, your goals for the property, and the project itself.

Purchase or Refinance: Choose Your Path

Each program can be used to buy a home or to refinance one you already own. We have a detailed page for each:

• FHA 203(k) Purchase Loan: buy a home that needs work and finance the repairs with FHA's lower down payment option.
• FHA 203(k) Refinance Loan: refinance the home you live in and fund needed repairs or updates in the same loan.
• HomeStyle Renovation Purchase Loan: buy and renovate with a conventional loan and more flexibility on the type of project.
• HomeStyle Renovation Refinance: use a conventional refinance to fund a remodel based on your home's after-improved value.

Is a Renovation Loan the Right Tool?

A renovation loan can make sense when the work is substantial enough to matter but you would rather not drain your savings or stack on higher-cost debt to pay for it. It may not be the best fit for a small cosmetic refresh, a project you want to do entirely yourself, or a timeline that cannot handle contractor scheduling and inspections. Sometimes a home equity loan, a HELOC, or a standard purchase with a separate plan for updates is the simpler answer. We'll tell you honestly which route fits.

On rates: Your rate depends on your scenario and the day's market. Reach out and we'll price it for real.

How We Help in Frisco, TX

Renovation loans reward preparation. We help you think through the project before you make an offer or apply, explain each step in plain English, and coordinate with your agent, contractor, and the other professionals involved. Because we have access to a wide network of lenders, we can compare how different lenders handle renovation loans for your scenario. Homeownership is about more than a mortgage, and a renovation is a big part of making a house fit your life. We want you to move forward with confidence.

All program details and examples on this page are illustrative only and are not an offer to lend, a commitment to lend, or a rate quote. Renovation loan guidelines, eligible improvements, property and occupancy rules, and timelines vary by program and lender and are subject to change. Contact our team for current details specific to your situation.