Renovation Mortgages in Washington State

Renovation Home Loan MortgageBuy, refinance, and improve a home with one smart mortgage

In many parts of Washington—especially the greater Seattle area—buyers are faced with a tough reality: move-in-ready homes are expensive, and homes that need work often get overlooked or can’t qualify for standard financing.

That’s where renovation mortgages come in.

A renovation mortgage allows you to finance the purchase or refinance of a home and the cost of improvements all in one loan—based on the home’s after-improved value. These programs can open the door to better locations, more affordable homes, and long-term value.

What Is a Renovation Mortgage?

A renovation mortgage combines:

  • The home’s purchase price (or current loan balance), plus
  • The cost of eligible repairs or improvements
    into one mortgage with one monthly payment.

Instead of needing separate construction loans or cash out of pocket, renovations are funded as part of your mortgage and completed after closing.

These loans can be used for:

  • Purchases
  • Refinances
  • Owner-occupied homes
  • In some cases, second homes or investment properties

Why Renovation Loans Make Sense in Washington

Renovation mortgages are especially helpful in Washington State because:

  • Many homes are older and need updating
  • Buyers want to stay in established neighborhoods
  • Fixer-uppers often offer better pricing and less competition
  • Renovations can improve livability, energy efficiency, and long-term value

They’re also a great solution when a home is:

  • Appraisal-challenged due to condition
  • Not eligible for traditional financing
  • Perfect in location, but not in layout or finishes

Common Renovation Projects

Renovation loans can cover a wide range of improvements, including:

  • Kitchens and bathrooms
  • Roofs, siding, windows, and flooring
  • Plumbing, electrical, and HVAC
  • Accessibility upgrades
  • Energy-efficient improvements
  • Basement conversions
  • Garage conversions
  • ADU or DADU projects (where zoning allows)

Renovation Mortgage Options

There are several renovation loan programs available. The right one depends on your goals, credit profile, and how the home will be used.

✔️ FHA 203(k)

Backed by Federal Housing Administration, this program offers:

  • Low down payment options
  • Flexible credit guidelines
  • Financing for both minor and major renovations
  • Purchase or refinance options

✔️ HomeStyle® Renovation

Offered through conventional lending and supported by Fannie Mae, this program:

  • Allows a wide range of renovation types
  • Uses after-improved value for qualifying
  • Can be paired with primary residences and some second homes

✔️ VA Renovation Loans

For eligible veterans, loans backed by the U.S. Department of Veterans Affairs may:

  • Require little to no down payment
  • Allow renovation costs to be included
  • Be used to improve livability or accessibility

✔️ Renovation Refinance Options

Homeowners may be able to refinance and:

  • Roll renovation costs into a new loan
  • Improve the home instead of moving
  • Add space, functionality, or income potential

How Renovation Mortgages Work

While renovation loans involve more coordination than standard mortgages, they are very manageable with proper guidance.

In general, the process includes:

  1. Getting pre-approved with renovation financing in mind

  2. Working with licensed contractors for bids

  3. Closing on the mortgage

  4. Completing renovations after closing

  5. Funds released in stages as work is completed

I guide clients through each step so expectations are clear from the start.

Renovation Loans Are Not “One-Size-Fits-All”

Renovation mortgages aren’t right for every situation—but when they do make sense, they can be incredibly powerful.

They’re often ideal for:

  • Buyers priced out of move-in-ready homes
  • Homeowners who want to remodel instead of relocate
  • Properties with deferred maintenance
  • Homes with ADU or expansion potential

The key is choosing the right program and setting the project up correctly from the beginning.

Let’s Explore What’s Possible

If you’re considering:

  • Buying a fixer-upper
  • Renovating your current home
  • Adding living space or an ADU
  • Improving a home’s condition to create long-term value

I’d be happy to help you explore renovation mortgage options and see how they fit into your bigger picture.

Let’s connect and talk through your goals, your timeline, and the best way to finance your renovation in Washington State.

Helpful Links:

Articles on Renovation Mortgages

Mortgage Programs in Washington State

Renovation Mortgage Refinance 

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