Buying a Fixer-Upper in Central Florida: How a Renovation Loan Works

Thinking about a fixer-upper in Orlando or Central Florida? See how a renovation loan rolls repairs into one mortgage and what to line up before you make an offer.

9/30/20262 min read

Why fixer-uppers get a second look

In Central Florida, a home that needs work can be the way into a neighborhood you could not otherwise afford. The catch is paying for the repairs. Cash for a new roof or kitchen is hard to find after a down payment, and a regular mortgage will not lend against work that has not been done yet. A renovation loan solves that by financing the purchase and the repairs together.

How a renovation loan works

With a renovation mortgage, the lender bases the loan on the home's value after the work is finished. The repair money is held back and paid out to the contractor as work is completed, usually in stages after inspections. You make one monthly payment instead of juggling a mortgage and a separate construction loan.

What the process looks like

Find the home and set a repair budget. Walk it with a contractor before you write an offer, not after.
Get a pre-approval for a renovation loan. Not every lender offers these, so ask early.
Write the offer with the financing type stated, and allow time for bids and inspections.
Finalize the scope of work. The lender needs a written list of repairs and a contractor's cost estimate.
Close, then renovate. Funds are released as the work passes inspection.

What to look for in a house

Repairs that add value or fix safety, such as roof, electrical, plumbing and HVAC
A structure that is sound. Major foundation or sinkhole concerns need a specialist before you commit
A neighborhood where the finished value supports your total cost

Plan for surprises

Older Florida homes often hide problems behind walls: outdated wiring, cast-iron drains, termite damage or moisture. Keep a cushion in the budget, and get a thorough inspection first. Our inspection partners explain what to check in their guide to home inspections.

Do not forget insurance

A house under renovation, or one with an older roof, can be harder to insure. Talk to an agent before closing. Quality RE Insurance can explain what carriers look at for property insurance in Florida.

Financing the purchase

Your loan officer can walk through which renovation programs fit your situation and what the payment could look like. Quality Real Estate Finance works with buyers on renovation and purchase loans.

Start your search

Ready to look at homes with potential? Browse Orlando real estate with Quality Real Estate Services, or call us to talk through a fixer-upper search.

This article is general information, not a loan offer or financial advice. Program rules, limits and eligibility change, so confirm current terms with a lender.