Tampa Renovation Loans for Homes

Tired of looking at outdated or fixer upper homes to buy?  No extra money to fix them up? Here is a solution you may not have considered... 

Tampa Renovation Loans for Homes or “Rehab” loans allow you to finance future home improvements in your loan. 

Did you know that 75-80% of U.S. homes are 20 years old.  Some will argue that updates need to be done on a home as early as 10 years old.  The average age of a home in the U.S. is 37 years old.  

Believe me, as an experienced buyer’s broker showing homes on a consistent basis, I can assure you there is no shortage of homes that need renovations or updates.  

Unless, of course, you are buying new home construction in Tampa Bay. 

All homes need something…

The status of the real estate market is not helping.  There is a shortage of homes on the market, not just in Tampa, but across the U.S.  

Many sellers are choosing not to update the homes either and selling homes in As-Is Condition, which is leaving buyers with a shortage of renovated homes.  Home flippers are not filling the gap either.

This leaves a buyer with no choice but to buy a home that needs work.   

Buying a “fix up” home can cost more to fix it up then the buyer's available cash. Completing the purchase usually takes most of a buyer’s cash available, with not much wiggle room.

Given these challenges, renovation loans for homes are making a comeback.   Let’s dive in to learn about the pros and cons of these loans.

Benefits of Tampa Renovation Loans…

Options to think about when considering a renovation loan for your home purchase. 

  • Finance Repairs and home upgrades.
  • Renovate in the way you want.
  • Renovations add value to property.
  • Make the home more energy efficient.
  • Low Down payment.
  • Can be used for purchases and refinancing.
  • Can be used for Owner Occupied, Second Homes, Investor Homes.
  • Can be used for Single Family, Condo, Manufactured Homes, 1-4 Units.
  • Can be used for home building on foundation and ADU’s.
  • Many programs do not have minimum repair amounts.
  • Acceptable Credit scores of 580+.
  • You can use the contractor of your choice.

Best Way to get a Renovation Loans for Homes

Ideally, for Tampa renovation loans, it's best to purchase a home under market value.  A low price is not required, but can give you more borrowing power.  

During the transaction process you must get estimates from contractors on what you wanted fixed or changed.  

The repair estimates then are provided to the appraiser so they can determine what the new property value would be with the new improvements.  The appraisal is subject to the value plus the new improvements.  Your down payment and loan is based on the new price.

You would then close on the home and have access to fix up money. The lender would provide the money either at once or in draws so that the home is renovated within a certain time frame.   

Your renovation and mortgage payments will typically begin right after closing, but some loans allow you to delay your mortgage payments for the first 6 months, in cases where you are not living at the property during the renovations.

Types of Tampa Renovation Loans

FHA 203K Limited:  This program is for light rehab or deferred maintenance issues; replacing roof, HVAC, flooring, painting, appliances, minor kitchen remodels, window or septic system plus a few more.   This type of renovation loan would be for cosmetic changes, not structural. The maximum allowance for repairs or renovations is $35,000. Maximum loan amount 110% of appraised value after renovations completed. Minimum 3.5% down payment. 

FHA 203K Standard:  This type of renovation loan program allows for structural alterations and additions: adding a garage or an entire kitchen or bathroom remodels.  This renovation loan for a home can also be used to install appliances, repair a swimming pool, or make upgrades to heating, air conditioning, plumbing, electrical, roofing, painting, energy conservation and more.   This renovation loan requires a HUD consultant to review the paperwork with the contract for the appraisal.  The repairs and renovations can go beyond $35,000. Maximum loan amount is 110% of appraised value after renovations are completed. Minimum 3.5% down payment.

For more information to compare the FHA 203K Limited vs. FHA 203K Standard. 

Fannie Mae Homestyle:  This Tampa renovation loan has no restrictions on the type of home improvements, but it must add value to the property.  Maximum funds (including soft cost, contingency reserves, and payment reserves) cannot exceed 75% of the estimated completed value of the property. This renovation loan can also be used for an unfinished new construction property that is at least 90% completed.  Third party consultants are required on these loans.  Minimum 5% down payment for owner occupied homes, 10% for second homes, and 15% down for investors.  Luxury items such as pools and docks are allowed.

Overview of the Fannie Mae Homestyle Renovation Loan.

Freddie Mac CHOICERenovation:  This has very similar features to the Fannie Mae Homestyle loan and also offers smaller scaled renovations with Freddie Mac CHOICEReno Express.  Compare the two programs CHOICERenovation and CHOICEReno Express side by side. 

Considerations for these Renovation Loans for Homes

These Tampa renovation loans are more complicated and take a special type of buyer.  In order to have a smooth loan process, consider these tips when doing these renovation loans.

  • Type of Loan:  The type of repairs and repair costs will dictate the type of loan you need. 
  • Selected Lender:  You must use an experienced loan officer or mortgage broker with a track record of closing renovation loans.   These are very complicated loans. 
  • Buyers must have time:  These renovation loans are administratively time consuming during the transaction, and execution of renovations.  You will be required to make quick decisions on repairs for contractors to provide estimates.  You must be laser focused and detail oriented.

General Contractors:  You should use General Contractors that are experienced with doing these loans and writing for appraisal/lender friendly reports, as well as a payment schedule.

  • Understand the Appraisal Process:  Keep in mind that the new price of the home may or may not cover 100% of the renovation costs. 

For example,

Acquisition of the home           $500,000

Renovation Costs                      $50,000

Appraised price needed            $550,000

If the appraisal only comes in at a value of $540,000, then you would need to either pay the $10,000 at closing or cancel the contract or remove some of the renovations.

  • Understanding your costs: Your closing costs and interest rates for renovation loans will be higher than with a traditional conventional or FHA loan as this is a labor-intensive loan for the lender.  In addition, there are costs associated with this loan such as the cost for lender inspection of the home improvement and contingency fee that covers you in the event the actual repair costs are higher than the estimate.  These extra costs are not incurred for traditional loans.
  • Understand the Program.  Buyers need to understand the Tampa renovation loans specifics.  

The buyer’s eligibility (primary home vs. second home vs. investor), minimum dollar amount of renovations, ineligible repairs/renovations, loan restrictions, and time frames for completion and financial constraints. 

Examples of Qualifying Repairs and Updates 








Mold/Lead Remediation





Pools (repair only FHA)

Appliances (washer and dryer)



Room Additions



Tree Removal


Summer Kitchens

Well & Septic

Finish Attic/Sunrooms


Raze/Move Home

ADU (accessory dwelling unit)

Build a Home (existing foundation)

Buyers Broker of Florida not only helps home buyers evaluate and negotiate for a home they can also suggest possible financing options. Do not buy a home without an Experienced Buyer Broker on your side to navigate the home buying and financing process. Call Erika at  727-293-5896…to help fulfill your home buying dream.

Contact Buyers Broker of Florida

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