A renovation loan lets you finance both the purchase (or refinance) of a home and the cost of repairs, upgrades, or additions—such as building an Accessory Dwelling Unit (ADU)—all in one mortgage. This makes it easier to turn a fixer-upper into your dream home without juggling multiple loans or high-interest credit cards.
Benefits of a Renovation Loan:
- One Loan, One Payment: Combines purchase/refinance and renovation costs into a single monthly payment.
- Immediate Improvements: Begin your remodel, repairs, or build an ADU right after closing.
- Boost Property Value: Renovations and additions can increase your equity and resale price.
- Rental Income Potential: Renting out an ADU can generate steady monthly income and help offset your mortgage payment.
- Flexible Project Options: Covers kitchen/bath remodels, structural repairs, energy upgrades, and new additions like an ADU.
- Lower Interest Rates: Since it’s part of your mortgage, rates are often better than personal loans or credit cards.