What is a renovation loan and how does it work in Washington?

A renovation loan allows you to buy a property and finance the cost of repairs or upgrades into a single mortgage. In Washington, the most common renovation loan options are the FHA 203(k) (for buyers using FHA financing) and the Fannie Mae HomeStyle (for conventional buyers). After purchase, draws are released to contractors as work is completed. You close once, carry one loan, and move in after renovation — no separate construction financing required.