Renovation Mortgages: Turning “Fixer-Uppers” Into Your Dream Home

Inspired by my new gingerbread house renovation video!

Every home has a story — and sometimes that story includes a little frosting falling off the roof.

In my new Sora-generated video, you’ll see a fun twist: my animated character repairing a gingerbread house as though it were a real remodel. It’s a playful way to highlight a very real mortgage option many homebuyers and homeowners don’t realize exists: renovation loans.

Whether you’re dreaming of replacing outdated tile, opening up a kitchen, repairing a roof, or tackling a full home makeover, a renovation mortgage can help you finance both the home and the improvements in a single loan.

Let’s break down how these programs work — no gumdrops or royal icing required.

What Is a Renovation Mortgage?

A renovation mortgage (also called a rehab loan) allows you to:

• Buy a home and finance repairs/updates, or
• Refinance your current home and roll in the cost of improvements

All in one loan, with one closing and one monthly payment.

Instead of paying for upgrades out of pocket or relying on high-interest credit cards, a renovation mortgage lets you borrow based on the future value of the home after the improvements are complete.

Just like in my gingerbread-house video — you don’t need a perfect home to get started. You just need a vision.

Popular Renovation Loan Options

There are several loan types depending on your goals and eligibility:

Fannie Mae HomeStyle® Renovation and Freddie Mac CHOICERenovation®

A flexible conventional loan option that allows improvements like:

• Kitchen and bathroom remodels
• Roofs, windows, flooring
• Energy efficiency upgrades
• Additions or structural repairs
• Landscaping, decks, fencing
• Even “luxury items” (hot tubs, outdoor kitchens, etc.)
• Building an Accessory Dwelling Unit (ADU)
• Multi-unit purchases (as long as you occupy one unit)

Great for:

• Buyers who want more property choices
• Remodeling older homes
• Adding value before move-in
• Investors (SFR 1-Unit)

FHA 203(k) Standard and Limited

Government-backed renovation options.

Standard 203(k):
Ideal for bigger remodels like:

• Structural improvements
• Major repairs
• Room additions
• Fixing health/safety issues

Limited 203(k):
Perfect for smaller projects:

• New flooring
• Paint
• Appliances
• Minor repairs

How Renovation Loans Benefit Buyers

✔️ Expand Your Home Search

Instead of competing for move-in-ready homes, you can consider properties that need work — often with less competition.

✔️ Finance Improvements Affordably

You get a mortgage interest rate, not a credit card interest rate.

✔️ One Loan, One Payment

No separate construction loan required.

✔️ Build Equity Faster

Because you’re financing the future improved value, renovations can increase your home’s worth from day one.

✔️ Customize Your Home

From a new kitchen to a refreshed exterior — you design the upgrades you want.

Why a Gingerbread House?

The gingerbread house in my Sora video is a fun reminder that houses — real or sugary — aren’t always perfect. Shingles crack, siding wears down, and sometimes a gumdrop falls off.

But with the right financing strategy, you can turn a fixer into a dream home.

My goal was to create an educational but approachable way to help people understand how renovation financing works. If a gingerbread house can get a makeover, yours can too!

Who Should Consider a Renovation Mortgage?

Renovation financing may be a great fit if you are:

• A first-time homebuyer priced out of move-in-ready homes
• A homeowner who wants to refinance and remodel
• Someone shopping for a home in a competitive market
• A buyer dreaming of custom upgrades
• A homeowner with repairs you’ve put off but want to address now

What Can You Renovate?

Nearly anything, depending on the loan program:

• Fix a leaking roof
• Replace outdated cabinets
• Add a bedroom or bathroom
• Convert a garage
• Install solar or energy-efficient features
• Update plumbing or electrical
• Create an open concept layout
• Upgrade landscaping or outdoor spaces

If you have a Pinterest board full of ideas — a renovation loan might be the right path.

Final Thoughts

Renovation mortgages open doors to possibilities — literally and figuratively. You don’t need a perfect house to start. You just need the right financing and a partner who can guide you through the process.

If you’re curious about how renovation financing works, whether for a purchase or a refinance, I’d love to help you explore your options. Together, we can turn your vision — gingerbread or not — into reality.