Working With Renovation Loans

A renovation loan combines the purchase of a home and the cost of improving it into one mortgage with one closing. Because the loan is sized against the value the home is expected to have once the work is finished, a renovation transaction differs from a standard purchase at nearly every step: the offer, the contractor bids, the appraisal, the closing timeline and the months after closing.

This 3-hour course explains how those transactions work from the agent's side of the deal. It covers FHA 203(k) Limited and Standard, Fannie Mae HomeStyle Renovation, Freddie Mac CHOICERenovation and CHOICEReno eXPress, VA alteration and repair financing, and the USDA guaranteed purchase loan with repairs; how the as-completed value is developed; what happens between contract and completion; and where the agent's role begins and ends.

On completing the course, you will be able to:

• Identify transaction and property situations in which renovation financing may apply
• Compare the programs by occupancy, property type, repair limits, completion periods and draws
• Explain how an as-completed value is developed, and the options when the appraisal does not support price plus renovation cost
• Sequence a renovation transaction from contract through draws, holdbacks, title updates and the completion report
• Identify property conditions that change a renovation plan
• Explain the limits of the agent's role under fair housing law and loan-originator licensing rules

Five sections, each with a section quiz, followed by a final exam. Every lesson that states program rules links to the original HUD, Fannie Mae, Freddie Mac, VA and USDA sources. Program rules are current as of October 2026.