Buy the fixer. Finance the fix. One loan.
Roll the purchase price and renovation costs into a single mortgage instead of scrambling for a second loan after closing.
A renovation loan is a single mortgage that combines the purchase price of a home with the cost of fixing it up, based on the home's projected value after the work is done. The two most common options are the FHA 203k loan and the conventional HomeStyle renovation loan.
With an FHA 203k loan in Texas, from older central Austin neighborhoods to fixer-uppers statewide, you can buy a property that needs work and finance the renovation in one closing instead of taking out a separate loan afterward.
Renovation loans in Texas: overview
You found a house with good bones but dated everything. Or it needs real work. New roof. Updated systems. A full kitchen gut. Renovation loans let you finance the purchase and the rehab together in one mortgage, based on the projected value after improvements.
That means you can buy a property other buyers are passing on and finance the work to make it exactly what you want. One loan. One closing. The contractor gets paid through a draw process as the work gets completed and inspected.
These loans have more moving parts than a standard purchase. Contractor bids. Inspections. Draw schedules. Consultant involvement on bigger projects. That's exactly why you want one person coordinating everything.
Project planning companion
Renovation project budget
A work quote is only one part of the budget. Set aside project contingencies, other expenses and a protected cash reserve before deciding how much funding is still needed.
This is a project-only planning worksheet, not a mortgage payment, purchase cash-to-close or loan-proceeds calculation. A funding gap is not an approved loan amount or a recommendation to borrow.
Blank worksheet. No example amounts are assumed.
Amounts in US dollars, from $0 to $999,999,999.99 each. Blank means unknown; enter 0 only when a cost or cash amount is known to be zero. Count each expense once. Include only costs still to be paid and cash available now, after any deposits already paid.
Funding-needs summary
Incomplete: amounts have not been entered.
- Project costs before financing
- Not calculated
- Upfront financing costs
- Not calculated
- Total remaining budget
- Not calculated
- Cash above protected reserve
- Not calculated
- Allocated cash counted
- Not calculated
- Project funding still needed
- Not calculated
- Savings retained after counted allocation
- Not calculated
- Reserve target shortfall, separate from project
- Not calculated
- Requested allocation not applied
- Not calculated
The project gap does not include a reserve shortfall. A zero gap means only that the entered budget is covered by the counted cash. It does not establish affordability, cost completeness, loan eligibility, proceeds or payment timing.
What the numbers mean
Total budget = remaining work + additional contingency + design + permits + other expenses + upfront financing costs. Counted cash is the smallest of your chosen allocation, the total budget and cash above your protected reserve. Funding still needed is the total budget minus counted cash. Amounts are added in cents; no interest, property value, equity or loan payment is modeled.
Financing approved renovation work and receiving unrestricted cash from equity are different transactions. An expected after-renovation value is not cash available for this project and must not be entered as current value in a cash-out screen. A budget gap does not establish which costs can be financed, how much a lender may approve or when funds become available.
Worksheet entries are not saved by this tool, placed in the URL or submitted to Kellibrooke. The page retains its existing site analytics; worksheet fields and results are masked for session replay. Printing creates a local copy you control. No names, account numbers or documents are needed.
Keep the no-new-debt options in view
- Defer the project
- Consider waiting and building cash before discretionary work. Ask an appropriate professional whether a repair can safely wait; this worksheet cannot assess urgency.
- Phase or reduce the work
- Request a separate quote for a smaller, workable phase, including any repeated setup, permit or design expenses. Recheck the budget for that phase; a smaller scope is not a guaranteed proportional saving.
- Use allocated cash
- A cash-funded project avoids new borrowing for the project, but reduces available savings. Keep your reserve choice visible. CFPB notes that an emergency-fund target depends on your circumstances. CFPB emergency savings guide.
If you explore borrowing, ask about the interest rate, fees, security interest, repayment term, future payment changes and total cost. Unsecured borrowing does not use your home as collateral; home-secured borrowing can put the home at risk if you cannot repay. A cash-out refinance replaces the existing mortgage, and a higher replacement rate can increase costs on the existing balance as well as the extra borrowing. None of these choices is ranked or offered by this worksheet. CFPB borrowing alternatives; CFPB home-equity risks.
For existing structural explanations, see replacing a mortgage versus a separate home-equity loan and the Texas homestead cash-out guide. These references do not establish product availability or individual eligibility.
Questions before committing
- Which quote items are included, excluded, already paid or still estimates? What is due before work starts and at each later stage?
- Can the work wait or be phased safely? What would a separate phase cost, and which expenses recur?
- What are the existing mortgage balance, interest rate and remaining term? Would a proposal replace that mortgage or add another obligation?
- What fees are cash-paid, financed or deducted from proceeds? Which costs cannot be financed, and when is each payment due?
- Over the same comparison period, what are total payments, fees and remaining debt under each option, including any mortgage kept in place?
- Would the cash reserve and ongoing household budget still work after the project, including overruns?
Where a Loan Estimate applies, review its loan terms, closing costs and cash-to-close details with the lender. An upfront fee total is not lifetime borrowing cost. CFPB Loan Estimate explainer.
This companion does not assess a contractor, endorse a provider or promise a loan, project start, completion date or increase in home value. General education, not individualized financial advice.
Kellibrooke Mortgage Partners, LLC, NMLS #2022197. Case Laviolette, NMLS #2025459. Texas-licensed residential mortgage broker and loan originator. Equal Housing Opportunity. All loans subject to credit approval; this is not a commitment to lend.
Key Details
How I handle Texas renovation loan files
I look at the property and the scope of work first. Determine whether it's a limited or standard fit. Review contractor bids. Price the loan. Then manage the draw process once the work starts.
The coordination between you, the contractor, the inspector, and the lender is where these files get complicated. I keep it organized so the work doesn't stall waiting on money. Building from the ground up instead of renovating? See construction loans.
Questions I Get
What's the difference between limited and standard?
Limited covers smaller cosmetic projects under a set dollar amount. No structural work, no consultant. Standard covers big renovations including structural, additions, and full rehabs. Requires a HUD consultant.
Can I do the work myself?
Contractor and self-help rules differ between FHA 203(k), HomeStyle, project types, and lenders. Qualified contractors are commonly required, and any borrower-performed work must be expressly permitted and documented before closing.
How is the loan amount determined?
Purchase price plus renovation cost, subject to program loan limits. The appraiser provides a projected "after-improved" value.
How long does the renovation need to be done?
Completion windows differ by program, project, and lender, and extensions are not automatic. I confirm the controlling deadline and draw requirements before closing.
What is a 203k loan?
An FHA 203k loan is a government-backed renovation mortgage that lets you finance both the purchase of a home and the cost of repairs or improvements in one loan. It's built for properties that need work to meet livable standards or that a buyer simply wants to update, and it follows FHA's flexible qualifying guidelines.
What is the difference between an FHA 203k loan and a HomeStyle renovation loan?
The FHA 203k loan is backed by FHA and follows FHA's more flexible credit and qualifying rules, which makes it a common fit for buyers with thinner files. The HomeStyle renovation loan is a conventional product and tends to allow a wider range of property types and renovation work, including some projects 203k won't cover. I compare both against your property and your situation to find the better match.
Who qualifies for a renovation loan in Texas?
Renovation loans in Texas are open to buyers purchasing a primary home that needs work, and HomeStyle can extend to certain second homes and investment properties. You'll need qualifying income, an acceptable credit profile, and a property the appraiser can value based on the planned improvements. I review your numbers up front so you know where you stand before you make an offer.
What credit score do I need for an FHA 203k loan?
There's no single number I can quote, because pricing and approval depend on the full picture, not one score. Credit profile affects lender options on both 203k and HomeStyle. If your credit needs work first, I'll tell you honestly and point you toward improving your credit score before we move forward.
Can I refinance into a renovation loan to fix up a home I already own?
Yes. FHA 203k and HomeStyle renovation refinances can combine the current balance and an eligible renovation budget in one new loan, subject to program and lender requirements. Financing approved improvements is distinct from taking unrestricted cash from home equity. Kellibrooke does not offer FHA cash-out financing. A conventional Texas homestead cash-out refinance is a separate transaction subject to Section 50(a)(6) and lender requirements.
How does a renovation loan work?
You start with a property and a scope of work, and the appraiser values the home based on its projected condition after the improvements. The purchase price and the renovation budget combine into one mortgage at one closing. After closing, the renovation funds are held back and released to your contractor through a draw process as the work is completed and inspected, so the money is tied to actual progress rather than paid out all at once.
What work can a renovation loan cover?
It depends on the program, but renovation loans can cover a wide range of work: kitchen and bath remodels, roofing, flooring, windows, updated plumbing, electrical, and HVAC systems, and on the standard 203k or HomeStyle, structural repairs and room additions. The limited tier is meant for smaller, non-structural projects, while the standard tier handles major rehabs. Luxury items and most do-it-yourself labor generally don't qualify, and I confirm what your specific scope allows before you commit.
Found a diamond in the rough?
Send me the listing and a rough scope of work. I'll tell you whether a renovation loan makes sense for the deal.