Home Renovation Loans

Turn the right home into your home.

Purchase or refinance

Low down payment options

One mortgage, more possibilities

Finance your home and renovations together.

The right home may not be move-in ready - and your current home may need changes to better fit your life. A renovation loan can combine eligible renovation costs with your mortgage, helping you finance the property and planned improvements through one loan.

Michigan First offers FHA and Conventional renovation mortgage options for purchasing or refinancing an eligible home. Your Mortgage Loan Officer can help you compare programs and understand which improvements may qualify.

Make the home work for you

A home does not need to match every part of your vision on the day you purchase it. Renovation financing can provide the opportunity to improve a property’s condition, functionality or design while incorporating eligible project costs into your mortgage.

A renovation loan may be used for improvements such as:

Updating a kitchen or bathroom
Repairing or replacing a roof
Improving heating, cooling, plumbing or electrical systems
Replacing flooring, windows or siding
Improving accessibility
Updating an older or outdated home
Addressing eligible health or safety concerns
Making other qualifying structural or cosmetic improvements

The improvements permitted, project requirements and maximum renovation amount will depend on the selected loan program.

How does a renovation loan work?

A renovation loan is based on both the property and the planned improvements. Depending on the program, the home may be evaluated using its expected value after the eligible renovations are completed.

Your approved renovation funds are generally reserved for the project and released as work is completed. This helps ensure the improvements follow the approved plans and program requirements.

The process typically includes:

Discuss Your Plans

Talk with a Michigan First Mortgage Loan Officer about the property, improvements and estimated project costs.

Select a Renovation Program

Your Mortgage Loan Officer will help you compare available FHA and conventional options based on your qualifications and renovation plans.

Prepare the Project Details

You may need to provide detailed contractor estimates, renovation plans, specifications and other project documentation.

Complete the Mortgage Process

The property, proposed improvements and application will move through the necessary appraisal, title, underwriting and approval steps.

Close and Begin Renovations

After closing, approved funds are released according to the program’s draw process as qualifying work is completed and verified.

FHA and conventional renovation options

Michigan First offers multiple renovation mortgage programs. The right option will depend on your finances, property and proposed improvements.

FHA Renovation Financing

An FHA renovation mortgage combines an FHA-insured home loan with financing for qualifying repairs or improvements. FHA options may provide more flexible credit or down payment requirements for eligible borrowers.

FHA Renovation Loan features

Eligible borrowers may benefit from:

Also known as 203K Standard and 203K Limited
Down payment as low as 3.5%
Purchase and rate/term refinance options
Credit scores as low as
30-year fixed term
Renovation projects starting at $5,000
Minimum loan amount $40,000
Maximum loan amount based on FHA guidelines

Conventional Renovation Financing

A conventional renovation mortgage may provide additional flexibility for eligible properties, improvement types and borrowers who meet conventional mortgage requirements.

Program guidelines vary, including eligible properties, permitted improvements, down payment requirements, credit qualifications and contractor documentation. Your Mortgage Loan Officer can help you determine which option may fit your project.

Conventional Renovation Loan features

Eligible borrowers may benefit from:

Down payments as low as 3%
Purchase and eligible refinance options
Credit scores as low as 620
A 30-year fixed-rate term
Renovation projects starting at $5,000
Financing based partly on the home’s expected post-renovation value, when permitted
One loan for eligible mortgage and renovation costs

All loans are subject to credit approval, property eligibility, program requirements and applicable underwriting guidelines.

Renovation Loan or Construction Draw Loan?

Both products can finance property improvements, but they generally support different types of projects.

A renovation loan may be appropriate when you are purchasing or refinancing an existing home and want to complete eligible repairs or improvements.

A construction draw loan may be better suited to building a new home, completing a major structural renovation or undertaking a teardown-and-rebuild project.

The project’s size, property condition, plans and estimated costs will help determine which type of financing may be appropriate.

Explore Construction Draw Loans

What to consider before applying

Renovation financing requires more planning than a standard mortgage because both the property and the proposed work must be reviewed.

Before applying, consider:

Which improvements you want to complete
Which projects are essential and which are optional
Your estimated renovation budget
Whether you have selected a qualified contractor
How long the project may take
Where you will live while renovations are underway
Whether the completed home will support the anticipated property value
How unexpected costs or project changes will be handled

You do not need to have every detail finalized before your first conversation. A Mortgage Loan Officer can explain what will be required for the program you are considering.

Bring your renovation plans home

You do not have to choose between the right location and the right home. A Michigan First Mortgage Loan Officer can help you explore financing that accounts for both the property you are considering and the improvements you want to make.