Rehab Loan
Rehab Loan – Finance Your Home Purchase & Renovations in One Loan
What is a Rehab Loan?
A Rehab Loan, also known as a Renovation Loan, allows homebuyers and homeowners to finance both the purchase (or refinance) of a home and its renovation costs in a single mortgage. This loan is ideal for buyers looking to purchase a fixer-upper or homeowners planning significant improvements.
Benefits of Rehab Loan
✅ Finance Your Home & Renovations Together – No need for separate loans or high-interest personal loans.
✅ Low Down Payment Options – FHA 203(k) allows down payments as low as 3.5%.
✅ Increase Home Value – Invest in renovations that boost property value.
✅ Flexible Renovation Coverage – Fund structural repairs, modern updates, and even luxury additions.
✅ Perfect for Fixer-Uppers – Turn an outdated property into your dream home.
Rehab Loan Process
Step 1: Pre-Approval & Loan Selection
- Determine your eligibility and loan type (FHA 203(k), HomeStyle, or VA Renovation Loan).
- Get pre-approved to understand your budget.
Step 2: Find a Home & Plan Renovations
- Work with a contractor to create a detailed renovation proposal.
- Lender reviews and approves the renovation plan.
Step 3: Loan Processing & Appraisal
- The home is appraised based on its future (post-renovation) value.
- Loan is finalized and approved.
Step 4: Closing & Renovation Begins
- Close on your loan, and renovation funds are placed in escrow.
- Contractors begin repairs and updates.
Step 5: Project Completion & Final Inspection
- Renovations are completed, and a final inspection is done.
- Funds are disbursed to the contractor, and you enjoy your upgraded home!