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Investing in a high-value property often means more than just purchasing—it involves transforming it into your dream home. If your property is valued above $800,000 and needs upgrades, understanding your financing options is crucial. Two main renovation loan paths stand out: conventional renovation loans and jumbo renovation loans. This guide breaks down the differences to help you make an informed decision.
What is Renovation Financing?
Renovation financing refers to loans that allow you to purchase or refinance a home and include the renovation costs into the total loan amount. This can be a game-changer for buyers aiming to modernize or significantly upgrade a property—especially one valued at $800,000 or more, where traditional lending options may fall short.
Conventional Renovation Loans: An Overview
Conventional renovation loans are generally backed by Fannie Mae or Freddie Mac, such as the Fannie Mae HomeStyle® Renovation Loan. These loans are widely accessible but come with strict loan limits. For 2025, the conforming loan limit is $766,550 in most areas (higher in high-cost markets).
Pros:
- Competitive interest rates
- Can be used for both purchase and refinance
- Widely accepted by most lenders
Cons:
- Loan limits may cap out below your property’s value
- Stricter guidelines on debt-to-income (DTI) and loan-to-value (LTV) ratios
Ideal for:
Borrowers whose property renovation needs fall within conforming limits, even if the property itself is worth more than $800K.
Jumbo Renovation Loans: An Overview
Jumbo renovation loans are non-conforming loans for properties that exceed the conventional loan limits. They are particularly tailored for high-value homes and luxury renovations.
Pros:
- Higher loan limits accommodate large-scale renovations
- Flexible underwriting for creditworthy borrowers
- Often more suited to custom renovations or luxury upgrades
Cons:
- Higher credit score requirements (typically 700+)
- Larger down payment needed (10–20%+)
- Stricter approval processes and documentation
Ideal for:
Buyers or homeowners needing substantial renovation budgets that exceed conventional loan caps.
Key Comparison: Conventional vs Jumbo Renovation Loans
| Feature | Conventional Reno Loan | Jumbo Reno Loan |
| Loan Limit | Up to $766,550 (varies by location) | Above $766,550 |
| Down Payment | As low as 3–5% | Typically 10–20% |
| Credit Score | 620+ | 700+ recommended |
| Renovation Scope | Standard improvements | Luxury/custom renovations |
| Approval Process | Streamlined | More extensive underwriting |
Which Loan is Right for You?
Choosing between conventional and jumbo renovation financing depends on:
- Property value and project scope
- Your financial profile (credit score, income, assets)
- Desired renovation scale (cosmetic vs structural or luxury)
If your project fits within conforming loan limits, a conventional renovation loan offers a simpler path. However, for more ambitious projects on high-value homes, jumbo renovation loans offer flexibility and higher funding thresholds.
Internal Resources You May Find Helpful
- Understanding HomeStyle Renovation Loans
- The Complete Guide to Jumbo Loans
- Refinancing Options for High-Value Homes
FAQs
Can I get a renovation loan for an investment property over $800K?
Yes, but options are more limited. Jumbo renovation loans may be available depending on your lender’s guidelines.
Do renovation loans cover landscaping or pools?
Some do, such as the HomeStyle Renovation Loan, but jumbo renovation loans offer greater flexibility for luxury additions.
How long does the renovation loan approval process take?
Expect 30–60 days, especially for jumbo loans due to more rigorous underwriting.
Get Expert Advice
Looking to finance a renovation on a high-value home? Don’t guess—talk to our mortgage specialists today to find the best loan for your project.
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Need help planning your renovation financing strategy?
Contact us today and let’s make your luxury home vision a reality.
Get Expert Financing
- Matched with investor-friendly lenders
- Fast pre-approvals-no W2s required
- Financing options fro rentals, BRRRR, STRs
- Scale your portfolio with confidence
Our advice is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
