If someone is buying a house, but they want to add a second story, a renovation loan is a great financial product that can help them realize their vision of the property. It is nominally the same as a construction loan, but focused specifically on remodels rather than new-build construction
For example, if you buy a turnkey house that is a little beat up for $1 million, but need to redo the kitchen and add a second story, the loan is calculated based on the expected value of the home after the completion, with the total loan amount going to 70-80% of that value add.
