Andria TownsendMortgage Loan Originator · NMLS #2154631

Renovation loans · Arizona

Renovation loans in Arizona: buy and fix up with one loan

Quick answer

A renovation loan lets you finance the purchase (or refinance) of a home plus the cost of repairs in a single mortgage. The main options are the FHA 203(k), including the Limited 203(k) for smaller projects, and Fannie Mae's HomeStyle Renovation loan. Repair funds are held and paid out to contractors as the work gets done.

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Andria Townsend, NMLS #2154631 · NEXA Mortgage, LLC, NMLS #1660690 · San Tan Valley, AZ · Updated October 2026

Andria Townsend, Arizona mortgage loan originator, NMLS #2154631

Key facts at a glance

FHA Limited 203(k) Smaller, non-structural repairs; HUD raised the cap to $75,000 in 2024
FHA Standard 203(k) Larger and structural work; requires a 203(k) consultant
Fannie Mae HomeStyle Conventional option; can be used for primary, second, and investment homes
How funds work Repair money goes into an escrow account and is paid as work is completed
Contractors Licensed contractors and written bids are required

What is a renovation loan?

It's one mortgage that covers the home and the repairs. Instead of buying with one loan and using credit cards or a second loan for the work, the lender sets the loan amount based on the home's value after the repairs are done. Arizona has plenty of older homes in Mesa, Phoenix, Casa Grande, and Coolidge where this can make a lot of sense.

How does the FHA 203(k) work?

The FHA 203(k) has two versions. The Limited 203(k) covers smaller, non-structural projects like a new roof, HVAC, kitchen updates, flooring, or paint. HUD raised its cap to $75,000 in 2024. The Standard 203(k) handles bigger jobs, including structural work, and needs a HUD-approved consultant. Both follow normal FHA rules, including the 2026 FHA limit of $557,750 in Maricopa and Pinal County.

How does the Fannie Mae HomeStyle Renovation loan work?

HomeStyle is the conventional version. It can work for primary homes, second homes, and investment properties, and it has fewer limits on the types of improvements. It follows conventional credit and loan limit rules.

What can I use a renovation loan for in Arizona?

  • Roof, HVAC, and cooling system replacement (a big one here)
  • Kitchens and bathrooms
  • Flooring, paint, windows, and doors
  • Energy upgrades
  • Accessibility changes
  • Fixing items an appraiser flags

What should I expect during the process?

You'll need contractor bids before closing, and the appraisal will be based on the finished value. After closing, repair money sits in an escrow account and is released in stages as work is inspected. It takes more planning than a regular purchase, so start early and pick a contractor who's done renovation-loan work before.

Subject to eligibility, credit approval, and program guidelines. Programs can change.

Frequently asked questions

What is the most I can borrow for repairs with a Limited 203(k)?

HUD raised the Limited 203(k) repair cap to $75,000 in 2024. The total loan still has to fit FHA's loan limits and your qualifying.

Can I use a renovation loan on an investment property?

FHA 203(k) loans are for homes you'll live in. Fannie Mae HomeStyle can be used for second homes and investment properties.

Can I do the work myself?

Usually not. Renovation loans generally require licensed contractors and written bids.

Can I refinance into a renovation loan?

Yes. Both FHA 203(k) and HomeStyle can be used to refinance and remodel a home you already own.

How long do I have to finish the repairs?

Each program sets a timeline, typically several months. Your loan paperwork will spell it out.

Is a renovation loan harder to get?

The credit rules are similar to the base loan, but there's more paperwork and coordination with your contractor.

Related reading from my blog

Arizona loan programs

FHA Loans Flexible credit rules. 2026 limit: $557,750 in Maricopa and Pinal County. VA Loans For veterans and service members. No monthly mortgage insurance. Conventional Loans 2026 limit: $832,750. PMI can come off as you build equity. Jumbo Loans For loan amounts above $832,750 in 2026. USDA Loans Eligible areas across much of Pinal County. Income limits apply. Down Payment Assistance Home Plus, Arizona Is Home, Home in Five, and Phoenix Open Doors. First-Time Buyers Step-by-step help, from credit to closing day. Refinancing Lower your payment, drop mortgage insurance, or tap equity. Renovation Loans Roll purchase and repair costs into one mortgage.

Areas I serve in Pinal and Maricopa County

Pinal County San Tan Valley, Florence, Maricopa, Casa Grande and more. Maricopa County Phoenix, Mesa, Gilbert, Chandler and the West Valley. San Tan Valley I live here. New builds, HOAs, solar, and town changes. Queen Creek Two counties, one mailing city. I'll sort it out. Florence USDA-eligible spots, Merrill Ranch CFD, and VA help. Maricopa (city) The city is in Pinal County. Here's what that changes. Casa Grande I-10 corridor buyers, older homes, and new builds. Gilbert Move-up buyers, jumbo options, and Maricopa County help. Mesa Older homes, renovation loans, and new east Mesa builds. Chandler Relocation pre-approvals, conventional and jumbo options. Phoenix City of Phoenix Open Doors, Home in Five, and more.

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