Build new or upgrade what’s already there — here’s how to choose.

Not every dream home starts from scratch.
Sometimes, the right move is to renovate an existing property and make it your own.

But other times, building from the ground up gives you full control and a blank slate.

👉 The question is: Should you use a construction loan or a renovation loan?

Let’s compare both — and help you choose the financing that fits your vision, timeline, and budget.

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🏗️ What Is a Construction Loan?

Construction loans are used to build a home from the ground up, covering:

• Land (if needed)
• Labor and materials
• Permits and site prep
• Builder fees and inspections
• Everything from foundation to finishes

There are two types:

• One-time close (build + mortgage combined)
• Two-time close (construction, then separate mortgage)

📘 Best for buyers who want a custom build or new construction.

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🧰 What Is a Renovation Loan?

Renovation loans let you purchase or refinance a home and roll in the cost of improvements.

You can use them to:

• Fix structural issues
• Upgrade kitchens, baths, flooring
• Add rooms or convert layouts
• Improve energy efficiency
• Bring homes up to modern standards

Loan types include:

• FHA 203(k)
• Fannie Mae HomeStyle®
• Some conventional or non-QM rehab loans

📘 Best for buyers who want to transform an existing home — often in established neighborhoods.

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📊 Side-by-Side Comparison

Feature	Construction Loan	Renovation Loan
Used for	Building from scratch	Improving existing home
Includes land?	Yes (if needed)	No
Timeline	6–12+ months	1–6 months
Draws	Released in stages during build	Released during renovation phases
Builder/contractor required?	Yes	Yes (must be licensed and approved)
Home livable during process?	No	Sometimes
Popular loan types	One-time close, two-time close	FHA 203k, HomeStyle, conventional renovation
Best for	Custom home buyers	Fixer-upper buyers or refinancers

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🧠 How to Decide What’s Right for You

Choose a construction loan if:

• You want full design control
• The property you want doesn’t exist yet
• You already own land (or want to buy and build)
• You want energy efficiency and modern features from day one

Choose a renovation loan if:

• You love the neighborhood but not the home
• You’re buying a fixer-upper
• You want to build equity through improvements
• You prefer faster timelines and fewer unknowns

💬 We’ll help evaluate your goals, your budget, and what makes the most sense long term.

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🏢 Why PRMI?

PRMI offers both construction and renovation financing — and helps you:

• Compare total costs, timelines, and approvals
• Get matched with licensed builders or contractors
• Finance everything in one simple, supported process
• Avoid costly mistakes during bidding, planning, or permitting

Whether you’re building from scratch or reviving a diamond in the rough — we’re here to help you do it the right way.

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👇 Not Sure Whether to Build or Renovate?

Let’s talk through your options, your vision, and your numbers — and build the financing plan that fits your goals.