Video Transcript

00:00

What if the problem isn't that you can't find the right home? What if the problem is that you're only looking at homes for what they are today?

00:09

Instead of… What they could become.

00:13

Today's buyers are frustrated. Inventory's tight; higher home prices mean updated homes are selling at a premium, and many buyers are feeling stuck trying to choose among the right location, the right layout, the right price, and the features they actually want.

00:30

Maybe.

00:31

You found the home in the perfect neighborhood, but the kitchen is outdated.

00:36

Maybe it has the right floor plan, but it needs another bathroom.

00:40

Maybe it checks all the boxes.

00:42

But not all of them.

00:44

But… What if the opportunity wasn't finding the perfect house?

00:50

What if you could create it instead? I'm Michael Thayer, and I'm a mortgage advisor based in Nashville, Tennessee, serving clients nationwide.

00:57

And many buyers today don't realize that renovation financing may potentially allow eligible borrowers to purchase a home and finance in the approved improvements into their mortgage.

01:10

That could mean exploring possibilities such as kitchen remodels, additional bathrooms, outdoor living spaces, multi-generational living solutions, ADUs or in-law suites, accessibility improvements, and functional updates that help the home better fit your lifestyle.

01:29

Sometimes, the best opportunity isn't the fully updated home that everyone else is competing for.

01:36

Sometimes it's the home with the right location and potential.

01:41

That becomes the perfect home.

01:44

May not exactly exist the way you imagine it just yet today.

01:48

So, if you're exploring your options, schedule a strategy call. Let's explore what might be possible for you in your situation. We'll talk to you soon.

This image illustrates how renovation loans can help eligible homebuyers purchase a property and finance approved improvements through a single coordinated mortgage strategy. Instead of waiting for a fully updated home or limiting the search to move-in-ready properties, buyers may be able to choose the right location, purchase a home with potential, and finance renovations that better match their lifestyle, needs, and long-term goals.

Renovation financing can be used for a range of eligible improvements, including expanding living space, updating kitchens and bathrooms, improving functionality, modernizing outdated features, creating multigenerational living areas, and completing other approved home improvements. Depending on the loan program and borrower qualifications, the purchase price and renovation costs may be combined into a single loan with one closing.

This approach may help buyers see possibilities in homes that other buyers overlook. A property that does not initially feel like the perfect fit may become a stronger option when the purchase and renovation strategy are evaluated together. Renovation loans can give buyers more flexibility to focus on location, neighborhood, layout, and future potential rather than only considering homes that are already fully remodeled.

The image also highlights the key benefits of renovation financing: more space, improved function, and more possibilities. Buyers may be able to add living areas, upgrade important rooms, improve everyday usability, and create a home that better supports their current lifestyle and future plans.

A personalized renovation loan review can help determine which improvements may be eligible, how renovation costs could affect the loan amount, what cash may be required at closing, and whether the financing structure fits the buyer’s budget and long-term goals. Program availability, renovation guidelines, contractor requirements, appraisal standards, loan limits, interest rates, fees, timelines, and borrower qualifications vary by transaction and loan program.

This image explains the types of home improvements that renovation financing may help eligible buyers and homeowners complete, depending on the loan program, property, project scope, and borrower qualifications.

Renovation loans may be used for a wide range of approved projects, including kitchen remodels, bathroom renovations, additional bedrooms, mother-in-law suites, accessory dwelling units, outdoor living spaces, decks and patios, flooring and interior updates, roof repairs, garage conversions, accessibility improvements, basement finishing, energy-efficiency upgrades, and certain pool or backyard projects where permitted by the program.

The image also shows how renovation financing can support different goals. Some borrowers may want to modernize an outdated home, improve functionality, add more living space, create a multigenerational layout, improve accessibility, or complete major repairs. Others may use renovation financing to personalize a home and create improvements that better fit their lifestyle and long-term plans.

The type and scope of the renovation help determine which financing option may be the best fit. Smaller cosmetic updates may require a different loan structure than major construction, structural improvements, additions, or accessory dwelling units. A renovation loan review can help determine which projects may be eligible, how costs may be documented, whether contractor bids are required, and how the property's completed value may affect the financing.

Renovation financing may allow eligible borrowers to combine the purchase or refinancing of a home with approved improvement costs into a single coordinated mortgage strategy. Program guidelines, contractor requirements, appraisal standards, inspections, draw schedules, loan limits, timelines, fees, interest rates, and borrower qualifications vary by loan program and transaction.

This image explains the difference between necessary renovations and luxury- or lifestyle-focused improvements, and why the project's purpose can influence which renovation financing option is the best fit.

Necessary renovations are typically focused on health, safety, accessibility, functionality, property condition, and deferred maintenance. These projects may include roof repairs, plumbing or electrical updates, damaged flooring, structural or moisture-related repairs, accessibility modifications, HVAC replacement, and other improvements needed to make the home safe, functional, or livable.

Luxury and lifestyle renovations generally focus on comfort, personalization, expanded living space, and higher-end finishes. Examples may include outdoor living areas, swimming pools, premium kitchen remodels, luxury bathroom upgrades, accessory dwelling units, expanded living areas, and other improvements designed to enhance the homeowner’s lifestyle.

Not all renovation loan programs treat these projects the same way. Some financing options may be better suited for necessary repairs and property-condition issues, while others may allow a broader range of lifestyle-focused or higher-cost improvements. The property, renovation goals, budget, loan type, completed value, and borrower qualifications all play a role in determining the most appropriate financing structure.

A renovation strategy review can help borrowers understand which improvements may be eligible, how contractor bids and project costs may be documented, whether the work affects the appraisal, and how the renovation budget could be incorporated into the overall mortgage. This planning is especially important when the project includes structural changes, additions, accessory dwelling units, pools, extensive outdoor improvements, or high-end finishes.

The goal is to match the renovation financing to the project itself. By identifying whether the improvements are primarily necessary, functional, accessibility-related, or lifestyle-focused, buyers and homeowners can better compare available loan options and avoid choosing a financing structure that does not fit the scope of the work.

Program availability, eligible improvements, contractor requirements, inspections, appraisal standards, loan limits, draw schedules, interest rates, fees, and borrower qualifications vary by renovation loan program and transaction.

This image explains how renovation financing may help eligible homebuyers purchase a property, finance approved improvements, and create a home that better supports their lifestyle, future needs, and long-term financial goals.

A renovation loan may allow qualified buyers to combine the purchase of a home with approved renovation costs into a single coordinated mortgage. Depending on the program, financing may be based in part on the property’s expected value after the improvements are completed rather than only on its current condition.

This approach can help buyers look beyond outdated finishes, limited functionality, or a layout that does not fully meet their needs. Approved renovations may include kitchen and bathroom updates, additional living space, accessibility improvements, structural repairs, outdoor living areas, accessory dwelling units, and other eligible projects.

The image highlights five potential benefits of renovation financing:

Purchase the home: Buyers may be able to focus on location, neighborhood, lot, and long-term potential instead of limiting their search to fully renovated properties.

Finance approved renovations: Eligible improvement costs may be included in the overall financing structure, subject to program guidelines, contractor requirements, and project approval.

Use the future completed value: Some renovation loan programs may consider the property's anticipated value after approved improvements are completed.

Create additional functionality: Renovations may help buyers add space, improve the floor plan, modernize important rooms, create multigenerational living options, or make the home better suited to everyday life.

Build long-term equity potential: Strategic improvements may increase the usefulness, marketability, and future value of the property, although appreciation and equity growth are never guaranteed.

For many buyers, renovation financing offers an opportunity to build the home they need rather than waiting for the perfect home to appear on the market. A property with the right location and strong potential may become a better long-term fit when the purchase and renovation strategy are evaluated together.

A personalized renovation loan review can help determine which projects may be eligible, how renovation costs could affect the loan amount, what cash may be required at closing, how contractor bids and draw schedules work, and whether the financing structure aligns with the buyer’s budget and goals.

Program availability, eligible improvements, appraisal methods, contractor requirements, inspections, draw schedules, loan limits, interest rates, fees, project timelines, and borrower qualifications vary by both the renovation loan program and the transaction.

This image shows how renovation financing may help an eligible homebuyer purchase a nearly perfect property and make approved improvements that better fit the buyer’s long-term needs.

In this example, the home had the right location, a functional layout, and a purchase price that made sense, but it only had one bathroom. Rather than giving up the neighborhood, property, or overall opportunity, the buyer may be able to use renovation financing to add another bathroom and improve the home’s functionality.

A renovation loan can allow qualified buyers to evaluate the purchase and improvement strategy together. Depending on the loan program, approved renovation costs may be incorporated into the mortgage, rather than requiring the buyer to pay for the entire project separately after closing.

This type of financing may be useful when a home is close to what the buyer wants but still needs an additional bathroom, an updated kitchen, an extra bedroom, an accessibility improvement, an expanded living area, or another eligible renovation. The goal is to help buyers focus on the property's location, neighborhood, layout, and long-term potential rather than limiting their search to fully updated homes.

The image also illustrates the possible transformation from an older bathroom to a larger, modernized space with improved storage, updated finishes, a walk-in shower, and better everyday functionality. Renovation financing may help buyers personalize the home while remaining in a neighborhood they already value.

A property-specific renovation loan review can help determine whether the proposed bathroom addition or remodel is eligible, how contractor bids may be handled, how the appraisal could account for the completed improvements, and how the renovation budget may affect the estimated payment and cash needed to close.

Program availability, eligible improvements, contractor requirements, appraisal standards, inspections, draw schedules, loan limits, interest rates, fees, project timelines, and borrower qualifications vary by renovation loan program and transaction.

This image explains how renovation financing may help eligible homebuyers or homeowners create additional living space for a growing or multigenerational family.

In this example, the family needed more room for parents and extended family members, but moving into a larger home would have required a significantly higher purchase price. Instead, they explored renovation financing as a way to create an additional living area with greater privacy, comfort, and functionality.

Depending on the loan program and project scope, renovation financing may help fund approved improvements such as a private in-law suite, an accessory dwelling unit, a garage conversion, a home addition, a finished basement, an additional bedroom, a bathroom, a kitchenette, or other multigenerational living features.

This type of financing can help families remain in a neighborhood they value while adapting the property to changing needs. A well-designed multigenerational living space may provide more independence for parents, adult children, caregivers, or extended family members while still keeping everyone close.

The image also highlights the broader benefits of this approach: more space, more comfort, more flexibility, and more possibilities. Rather than waiting for a larger move-in-ready home to become available, renovation financing may allow eligible borrowers to create a more functional layout within the property they already own or are planning to purchase.

A personalized renovation loan review can help determine whether the proposed addition or in-law suite is eligible, how the future completed value may be evaluated, what contractor bids and permits may be required, and how the renovation budget could affect the estimated payment, loan amount, and cash needed to close.

Program availability, eligible improvements, zoning and permitting requirements, accessory dwelling unit rules, contractor standards, appraisal methods, inspections, draw schedules, loan limits, interest rates, fees, and borrower qualifications vary by property, location, and renovation loan program.

This image shows how renovation financing may help eligible buyers or homeowners transform an underused backyard into a more functional outdoor living space.

In this example, the home itself already worked well, but the backyard lacked entertaining areas, useful outdoor features, and the type of layout the owners wanted for relaxing, gathering, and spending time outside. Depending on the renovation loan program and borrower qualifications, approved outdoor-focused improvements may potentially be included in a renovation financing strategy.

Eligible projects may include patios, decks, pergolas, covered seating areas, outdoor kitchens, fire pits, improved landscaping, lighting, walkways, seating zones, and other approved exterior improvements. Certain programs may also allow pools or more extensive backyard projects, although eligibility varies significantly by loan type and project scope.

The image highlights how outdoor renovations can extend the usable living area beyond the home's interior. A well-designed backyard may create space to entertain, relax, gather with family and friends, and enjoy the property more fully.

Renovation financing may allow qualified borrowers to evaluate the home purchase or refinance, and the planned improvements together. This can provide a coordinated way to finance approved work, rather than relying entirely on separate cash reserves or completing each project over time.

A personalized renovation loan review can help determine which outdoor improvements may qualify, whether contractor bids and permits are required, how the completed project may affect the appraisal, and how the renovation budget could change the estimated payment, loan amount, and cash needed to close.

Program availability, eligible improvements, contractor requirements, local permitting, appraisal standards, inspections, draw schedules, loan limits, interest rates, fees, timelines, and borrower qualifications vary by renovation loan program, property, and location.

This image explains how renovation financing may help eligible buyers or homeowners make approved accessibility and mobility improvements that support safer, more comfortable, and more independent living.

The featured improvements include bathroom modifications, accessibility upgrades, entry access changes, and functional layout updates. These types of renovations may help reduce common barriers inside and outside the home while improving everyday usability for individuals with mobility challenges, aging homeowners, multigenerational households, caregivers, and family members with changing long-term needs.

Bathroom modifications may include walk-in or curbless showers, grab bars, built-in seating, wider clearances, improved lighting, and other features designed to make bathing safer and easier. Entry access improvements may include ramps, handrails, widened doorways, step-free entrances, and smoother transitions between indoor and outdoor spaces.

Functional layout updates may also improve movement throughout the home by creating wider pathways, more open floor plans, better room flow, and more accessible living areas. Depending on the project, these changes may support mobility, independence, safety, and overall quality of life.

Renovation financing may allow qualified borrowers to combine approved accessibility improvements with a home purchase or a refinance into a single coordinated mortgage strategy. This can make it possible to address important long-term needs without relying entirely on separate cash reserves.

A personalized renovation loan review can help determine which accessibility improvements may be eligible, whether contractor bids or permits are required, how the completed work may affect the appraisal, and how the renovation budget could influence the estimated payment, loan amount, and cash needed to close.

Program availability, eligible improvements, contractor requirements, appraisal standards, inspections, draw schedules, loan limits, interest rates, fees, timelines, and borrower qualifications vary by renovation loan program, property, and location.

This image explains how renovation financing may help eligible homebuyers and homeowners create a property that better fits their lifestyle, functionality needs, and long-term goals.

Instead of searching only for a fully renovated or move-in-ready home, buyers may be able to focus on the right location, neighborhood, floor plan, and overall potential. With the appropriate renovation loan strategy, approved improvement costs may be incorporated into the financing, allowing the buyer to purchase a home and complete eligible renovations through one coordinated plan.

Renovation financing may support a wide range of approved projects, including kitchen remodels, bathroom renovations, additional bedrooms, expanded living areas, accessibility improvements, outdoor living spaces, flooring updates, structural repairs, and other functional or lifestyle-focused improvements.

The image emphasizes that the right strategy depends on the borrower’s specific goals. Some buyers may want to personalize a newly purchased home, while current homeowners may be considering renovations to improve functionality, accommodate changing family needs, or create a home that works better for both today and the future.

A personalized renovation strategy review can help borrowers compare available financing options, determine which improvements may be eligible, estimate monthly payments and the cash needed to close, and evaluate how renovation costs could affect the total loan amount and the property's completed value.

The image also highlights the importance of exploring both the property and the financing together. A home that initially appears outdated or incomplete may become a stronger opportunity when the cost, scope, and potential value of the renovations are reviewed alongside the purchase or refinance.

A renovation loan consultation may include reviewing contractor estimates, project timelines, appraisal requirements, draw schedules, permits, eligible improvements, and the borrower’s overall financial goals. This planning can help determine whether renovation financing is an appropriate way to create more possibilities, greater functionality, and a home designed around the borrower’s needs.

Program availability, eligible improvements, contractor requirements, appraisal standards, inspections, draw schedules, loan limits, interest rates, fees, timelines, and borrower qualifications vary by renovation loan program, property, and transaction.