Found a home that's perfect — except it needs new floors, a kitchen update, or some other work? There's a mortgage for that. It's called a Purchase Plus Improvements mortgage, and it lets you roll the cost of renovations right into your home loan.

How Does It Work?

With a regular mortgage, you borrow money to buy the home as it is. With a Purchase Plus Improvements mortgage, you borrow enough to buy the home plus the cost of the renovations you want to do.

Here's the basic process:

  • You find a home you want to buy.
  • You get quotes from contractors for the work you want to do.
  • Your lender adds the renovation costs to your mortgage amount.
  • You close on the home and do the renovations.
  • Once the work is done, the lender releases the renovation money to your contractor.

The renovation money is held back until the work is completed. The lender might send someone to inspect the work before releasing the funds.

What Kind of Renovations Qualify?

Pretty much any improvement that adds value to the home can qualify. Common examples include:

  • Kitchen or bathroom renovations
  • New flooring
  • Basement development
  • New roof or windows
  • Paint and cosmetic updates
  • New furnace or hot water tank

Things that don't usually qualify: luxury additions like swimming pools, or work that doesn't permanently improve the property.

How Much Can You Borrow for Renos?

Most lenders allow you to add up to 10% to 20% of the home's value for improvements. So if you're buying a $400,000 home, you could potentially add $40,000 to $80,000 for renovations.

The key is that the improved value of the home has to support the total mortgage amount. A lender might order an "as-improved" appraisal to make sure everything lines up.

Why This Is Smart

Here's why people love this option:

  • You get to buy a home you might not otherwise consider — because you can fix it up.
  • The renovation costs are at mortgage rates, which are way lower than credit card or personal loan rates.
  • You build instant equity — a $40,000 renovation can sometimes add $60,000 or more in value.

Don't pass on a great home just because it needs some work. A Purchase Plus Improvements mortgage lets you see what a home could be — and finance that vision.

Bottom Line

If you've found a home that just needs a bit of love, this could be the perfect solution. You get one mortgage, one payment, and a home that's exactly how you want it.

Want to see if this works for your situation? Apply here and we'll run the numbers together.