Renovation Loans: FHA vs. Conventional

FHA 203(k) loans typically require a down payment of 3.5% and accept lower credit scores. Conventional renovation loans generally require 3% to 5% down but often expect higher credit scores and more reserves.

FHA 203(k) loans are only available for primary residences, while HomeStyle loans can be used for primary residences, second homes, and one-unit investment properties. These programs are not intended for short-term investment or resale.

FHA renovation loans are a good fit for buyers who need a more flexible approval process. Conventional options may be better for borrowers with strong credit who want more control over the renovation details and who may be financing a second home or investment property. A loan officer can help you compare both options and decide what works best for your situation.