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Renovation Financing Options

Don't let financing stand between you and your dream home. Explore the loan programs that can help you purchase, renovate, or improve your property with one affordable payment.

Your Options

Financing Programs We Work With

As an experienced renovation contractor, we work with homeowners using various financing programs. Here's what you need to know about each option.

Government-Backed • FHA Insured

FHA 203(k) Rehabilitation Loan

The FHA 203(k) combines your home purchase (or refinance) and renovation costs into a single government-backed mortgage. This is the most popular renovation loan program and the one we work with most frequently.

Down Payment
3.5%
Credit Score
580+
Limited 203(k)
Up to $75K
Standard 203(k)
$75K+
Finance purchase price + renovation in one loan
Borrow based on after-renovation value
Limited 203(k): 9-month completion timeline
Standard 203(k): For major structural work
Can be used for primary residences only
HUD consultant fees now financeable (2024 update)
Best For
First-time buyers purchasing fixer-uppers, or homeowners refinancing to renovate
Non-Profit Program • No PMI

NACA (Neighborhood Assistance Corporation of America)

NACA offers one of the most affordable mortgage options available—with no down payment, no closing costs, no PMI, and below-market interest rates. The tradeoff is a longer, more involved application process and required community participation.

Down Payment
$0
Closing Costs
$0
PMI Required
None
Interest Rate
Below Market
No minimum credit score requirement
Interest rates up to 0.75%+ below market (as low as 6% for 30-year in Jan 2025)
Can buy down rate further—even to 0.125% with seller contribution
Must complete workshops and counseling
$36/year membership fee required
Must participate in NACA advocacy events
Primary residence only—no investment properties
Longer process than traditional loans
Best For
Buyers with limited savings, lower credit scores, or those seeking the lowest possible costs
Conventional • Fannie Mae

HomeStyle Renovation Loan

Fannie Mae's HomeStyle loan offers flexibility for buyers who want conventional financing with renovation funds included. It allows more renovation types than FHA 203(k) and can be used for investment properties.

Down Payment
3-5%
Max LTV
97%
Completion Time
15 Months
Loan Limit (2026)
$832,750
No restrictions on renovation types
Can be used for investment properties and second homes
DIY work allowed (up to 10% of value)
Can finance up to 6 months of payments if home is uninhabitable
No minimum renovation amount required
Can combine with HomeReady for 3% down
Best For
Buyers wanting conventional financing, investors, or those with non-standard renovation plans
Conventional • Freddie Mac

CHOICERenovation Loan

Freddie Mac's CHOICERenovation mortgage is similar to HomeStyle but with some unique features, including longer completion timelines and special provisions for resilience improvements and accessory dwelling units (ADUs).

Down Payment
3-5%
Max Renovation
75% of Value
Completion Time
450 Days
Credit Score
620+
Allows ADU (Accessory Dwelling Unit) construction
Special provisions for resilience improvements (storm, fire, earthquake)
Longer 450-day completion window
Can combine with Home Possible for 3% down
Good for multigenerational households
Ideal for seniors aging in place
Best For
Larger renovation projects, ADU construction, or homes needing resilience improvements
Veterans Only • VA Backed

VA Renovation Loan

For eligible veterans and active-duty service members, the VA renovation loan offers no-down-payment financing with renovation funds included. Limited lender availability makes this option less common but highly valuable for those who qualify.

Down Payment
$0
PMI Required
None
Max Renovation
$50,000
Completion Time
75 Days
No down payment required
No private mortgage insurance (PMI)
Competitive interest rates
Requires Certificate of Eligibility (COE)
Limited to livability and safety improvements
Fewer lenders offer this product
Best For
Veterans and active-duty military purchasing homes needing moderate repairs
At A Glance

Quick Comparison

Program Down Payment Credit Score PMI Investment Property Completion Time
FHA 203(k) 3.5% 580+ Yes (MIP) ✗ 9 months (Limited)
NACA $0 None None ✗ Varies
HomeStyle 3-5% Varies If <20% down ✓ 15 months
CHOICERenovation 3-5% 620+ If <20% down ✓ 450 days
VA Renovation $0 Varies None ✗ 75 days
Disclaimer: Loan requirements, rates, and terms change frequently. The information provided here is for general educational purposes and was current as of early 2025. Always verify current requirements with your lender. Arise Above Construction is not a lender or mortgage broker—we're your contractor partner who helps execute your renovation once financing is secured.

Ready to Explore Your Options?

We've helped homeowners navigate renovation projects funded by all of these programs. Whether you're just starting to explore financing or already pre-approved, contact us for a free renovation estimate.

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