What can a renovation loan pay for?
As a rule, renovation loans finance permanent improvements that are attached to the home, add value, and meet local code: structural repairs, roofs and systems, kitchens and baths, additions, energy and accessibility upgrades, and similar work. What they do not finance is anything that is not permanent or that a program specifically excludes. The exact line moves by program, and the clearest divergence is over luxury items like a pool, covered below.
What can an FHA 203(k) cover, and what can't it?
The 203(k) Standard finances structural and major rehabilitation with a $5,000 minimum repair; the Limited covers non-structural repairs up to $75,000 in total work. Both fund permanent improvements that meet HUD's standards. The hard limit is luxury: a new pool, and new luxury items generally, are ineligible on a 203(k). The program will finance the repair of an existing pool, but not building a new one.
The existing-pool repair allowance has a dollar limit set by current HUD guidance. Because that figure is not one I will quote from memory, I confirm it against the current Handbook for your file rather than print a number here. The principle is settled even where the exact cap is something I verify case by case: new luxury is out, repair of what exists is in.
Does HomeStyle cover a pool and other luxury items?
Yes. Fannie HomeStyle allows luxury improvements, including a pool, when they are permanent and built to code (Selling Guide B5-3.2). Beyond luxury, HomeStyle finances the same broad set of permanent improvements as the other programs: structural work, systems, additions, and finishes. The practical catch is the appraisal, not the eligibility list: the as-completed value has to support whatever you add, including a pool.
What do Freddie CHOICERenovation and eXPress cover?
Freddie CHOICERenovation finances permanent improvements, including resilience work that hardens a home against disaster, and it allows luxury items like a pool when they are permanent and code-compliant. The full catalog of eligible improvements follows the Freddie Guide, so rather than print an exhaustive list I confirm a specific item against the Guide for your scenario. CHOICEReno eXPress covers the same kinds of work on a smaller scale, for quicker, lower-cost projects.
Where do the programs diverge on what they cover?
The headline divergence is luxury, and pools are the clearest example. FHA 203(k) bars a new pool and allows only the repair of an existing one. HomeStyle and CHOICERenovation both allow a pool when it is permanent and code-compliant. Past that, the programs largely overlap on permanent, value-adding, code-compliant work, with the 203(k) Limited carrying its $75,000 cap on non-structural repairs and the conventional programs leaning on the as-completed appraisal to set the ceiling. Matching your wish list to the right program is exactly the call I help you make.
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Related loan program: Renovation loans. See all your renovation financing options on the renovation loan hub.