Dated homes are inventory most buyers cannot finance on their own
Many listings sit because they need more work than a buyer can pay for after closing. Buyers who have saved enough to close rarely have a second pile of cash for a roof, a foundation repair, or a kitchen. Renovation loans solve that problem by financing the purchase and the planned improvements together, based on the home's expected value after the work is done.
For listing agents, that can mean more qualified showings on homes that would otherwise attract mostly investors. For buyer agents, it means clients can compete for homes in the neighborhoods they actually want instead of settling for whatever is move-in ready in their budget.
The two programs you will hear about most
Both programs require contractor bids reviewed before closing, an appraisal based on the as-completed value, and renovation funds held in escrow and released in draws as work is inspected.
| Question | FHA 203(k) | Fannie Mae HomeStyle |
|---|---|---|
| Occupancy | Primary residence | Primary, second home, or eligible investment property |
| Scope | Limited: non-structural repairs up to $75,000. Standard: larger and structural projects with a HUD-approved consultant | Broad range of improvements, including some upgrades FHA does not allow |
| Best fit | Buyers who want flexible credit guidelines | Buyers with stronger credit or non-owner-occupied plans |
How a renovation purchase fits a Texas contract
Renovation transactions have a few extra steps, and the smoothest ones plan for them from the offer. Matthew will walk you through a realistic timeline before your buyer writes, so the closing date and option period make sense.
- Before the offer: renovation pre-approval and a rough scope of the work the buyer wants.
- Option period: inspections, plus getting a contractor into the house for a detailed bid.
- After option: bid review, consultant report where required, and the as-completed appraisal.
- Closing: the purchase closes; renovation funds go into escrow.
- After closing: work begins, and draws are released as inspections confirm progress.
Plan for extra time compared with a standard purchase. Timelines vary with the scope of work, contractor availability, and appraisal scheduling.
For listing agents: market the potential, not just the condition
A line in the listing remarks noting that the home may be eligible for renovation financing can bring in buyers who would have scrolled past. Matthew can review a listing and give you a plain-language summary of which program could fit, so you can answer buyer agent questions with confidence.
Sellers often worry that a renovation buyer means a slower or shakier closing. Clear communication up front, an experienced renovation lender like Matthew, and a buyer with a contractor lined up go a long way toward easing that concern.
For buyer agents: widen the search without widening the budget
Search older neighborhoods
Close-in areas with dated homes can open up when your buyer can finance updates at purchase.
Handle inspection surprises
A roof, HVAC, or foundation issue does not have to end the deal if it can be built into the scope.
Compete with investors
Owner-occupant buyers can pursue the same homes investors target, with a clear plan to fix them.
Local sites for your clients
Each city site covers issues specific to that market, from foundation repair in North Texas to flood-zone planning in Houston and historic districts in San Antonio. Share the one that fits your client.
Austin
Older homes, ADUs, and Central Texas energy upgrades.
Dallas–Fort Worth
Foundation, hail, and fixer-upper offer strategy.
Houston
Flood zones, storm hardening, and older-home plumbing.
San Antonio
Military buyers, historic districts, and energy upgrades.
Fixer-upper guide
How buyers finance a home that needs work.
Renovation loan vs. HELOC
Helping past clients who want to renovate later.
Frequently asked questions
Will a renovation loan scare off my seller?
It does not have to. The key is setting realistic expectations for timing and keeping the seller's side informed. Matthew provides milestone updates so both agents know where the file stands.
Does the seller have to do anything differently?
Mostly, the seller needs to allow access for the contractor, the appraiser, and any required consultant during the contract period. Repairs are generally completed by the buyer after closing, not by the seller.
Can my buyer use their own contractor?
Usually, as long as the contractor is licensed where required, insured, and able to provide a detailed bid and meet the program's documentation requirements.
Can past clients use a renovation loan to update the home they already own?
Yes. Homeowners can refinance and renovate in one loan, subject to approval. For smaller projects, a HELOC or home equity loan may be a simpler option.
Do you work with Spanish-speaking clients?
Yes. The city sites are fully bilingual, and Matthew can keep your clients updated in Spanish throughout the process.
Talk with Matthew about a listing or a buyer
Tell us a little about your plans. Matthew will review your options and follow up — no obligation.
Prefer to start now? Start your pre-approval · (512) 952-1125