Renovation Refinancein Utah — FHA 203(k) & HomeStyle
Refinance your current mortgage and roll the cost of renovations into one new loan — one closing, one monthly payment, no separate personal loan required.
What is a renovation refinance?
A renovation refinance replaces your current mortgage with a new loan that also covers repairs or improvements, based on your home's expected value after the work. Utah homeowners typically use an FHA 203(k) or a conventional HomeStyle Renovation refinance, with contractor bids required and money paid out as work is completed.
Reviewed by Kenny Farshchian, NMLS #1639863Updated
What Is a Renovation Refinance?
A renovation refinance replaces your existing mortgage with a new loan that includes funds for repairs or upgrades. Instead of paying cash or taking out a separate personal loan, your renovation costs are rolled into a single new mortgage, based on your home's value after the improvements are completed.
Two main programs make this possible: the FHA 203(k) refinance and the Conventional HomeStyle Renovation refinance.
Already own the home and just need cash for repairs? This is different from a standard cash-out refinance — the after-improved value calculation can allow for more available funds specifically earmarked for your renovation.
Renovation Refinance Programs
FHA 203(k) Refinance
Refinance your existing mortgage — any loan type — into a new FHA loan that includes funds for repairs or renovations.
- Available on primary residences
- Combine your existing balance and renovation costs
- Limited (smaller projects) and Standard (larger, structural) options
- More flexible credit requirements than conventional
Conventional HomeStyle Renovation Refinance
Refinance into a conventional loan that rolls renovation costs into your new mortgage, based on the home's after-improved value.
- Available for primary, second homes, and investment properties
- No mortgage insurance once you reach 20% equity
- Broader range of eligible improvements
- Licensed contractor required to complete the work
Typically Eligible Renovations
The Renovation Refinance Process
Confirm Eligibility & Scope
We review your current mortgage, credit, and the renovations you're planning to determine whether FHA 203(k) or HomeStyle Renovation refinance fits best.
Get Contractor Bids
Licensed, insured contractors provide detailed bids for the work. Larger projects may require a HUD consultant to document scope and cost.
Appraisal 'Subject to Completion'
The appraiser values your home based on its condition after the planned renovations, which determines your new loan amount.
Close & Renovation Begins
Your existing mortgage is paid off, and renovation funds are held in escrow, released to your contractor in draws as work is completed and inspected.
Renovation Refinance Pros & Cons
- Fund renovations without a separate personal loan or credit cards
- One monthly payment for your mortgage and renovation costs
- Loan amount based on the home's after-renovation value
- May allow more available funds than a standard cash-out refinance
- Can potentially improve your rate or loan terms at the same time
- Longer closing timeline than a standard refinance
- Requires contractor bids and, for larger projects, a HUD consultant
- Funds are released in draws, not as a lump sum at closing
- More documentation required than a rate-and-term refinance
- Renovations must be completed within the program's timeline
Frequently Asked Questions
Yes. A renovation refinance — through FHA 203(k) or Conventional HomeStyle Renovation — replaces your existing mortgage with a new loan that includes funds for repairs or upgrades. The loan amount is based on your home's value after the renovations are completed.
A cash-out refinance gives you funds based on your home's current value, which you can use for any purpose, including renovations. A renovation refinance is specifically designed for home improvements — the loan amount is based on your home's value after the work is completed, which can allow for more available funds than a standard cash-out refinance.
Eligible projects typically include kitchen and bathroom remodels, roofing, HVAC, plumbing and electrical upgrades, flooring and cosmetic updates, and — with the Standard 203(k) or HomeStyle Renovation programs — structural repairs and room additions. Luxury items like pools have more limited eligibility.
In most cases, yes. Both FHA 203(k) and HomeStyle Renovation refinance loans generally require the work to be completed by a licensed, insured contractor, and funds are released in draws as the work is verified complete.
Because it requires contractor bids and an 'after-improved' appraisal, a renovation refinance typically takes longer than a standard rate-and-term refinance — often 45–60 days depending on the scope of the project and how quickly bids and documentation come together.
The Conventional HomeStyle Renovation refinance can be used on second homes and investment properties, in addition to primary residences. The FHA 203(k) refinance is limited to owner-occupied primary residences.
Ready to Fund Your Renovation?
Let's run the numbers on your current mortgage and renovation plans to see how much you could finance — and what your new payment would look like.