Guide to Home Renovation Loans in the Shenandoah Valley

Guide to Home Renovation Loans in the Shenandoah Valley

Do you have a home renovation project on your to-do list?

Whether you are preparing your home for sale or looking to improve your existing space, renovation financing can help you modernize your kitchen, update your bathroom, add an extra bedroom, and more. Renovation loans can also be obtained when you purchase a home that needs fixing up.

Here in the Shenandoah Valley, local real estate markets are heating up. You may have more equity in your home than you realize. Whether you’re still in the dreaming phase or ready to hire a contractor, let’s explore what renovation loans are and the different types of financing you can obtain.

What are renovation loans?

A renovation loan is a great option if you don't want to move, but do want more space in your home.

There isn’t one type of home renovation or home improvement loan. We’ll explore the different options for renovation loans below; for now, all you need to know is that a home renovation loan is any type of financing used to renovate or improve your loan.

Why use a renovation loan?

There are many reasons to finance home renovations. Here are a few examples:

  • Take out a home renovation loan when you buy your house to make a fixer-upper livable.
  • It can be cheaper to finance an addition and other improvements to your existing home instead of covering the costs of selling it and buying a new one.
  • You may be able to sell your home quicker and for a higher price if you do a complete renovation first.

What can renovation loans be used for?

Renovation projects such as roof repairs, new siding, and updated windows will save you money in the long run and make your home a safer place.

There is almost no limit to what your home renovation financing can be used for. From cosmetic improvements to essential repairs, here are some ideas:

  • Roof repairs
  • New siding
  • Updated windows
  • New flooring
  • Installing/updating heating and cooling systems
  • Solar panels and other energy improvements
  • Mold remediation/waterproofing
  • New kitchen or bathroom that would add value to the house
  • Addition to add square footage/another bedroom
  • Get rid of termites and other unwanted pests

Home Renovation Costs in the Shenandoah Valley

Overall, the cost of a general home renovation project in Staunton, VA ranges from a minimum of $8,249 to a max cost of $65,998 with an average of $37,123.

In Harrisonburg, the range is $8,850 to $70,807 and the average is $39,828.

The average cost of a general home renovation project in Staunton, VA averages $37,123.

Let’s look at average costs for specific types of renovation projects:

Kitchen Remodel

  • The average cost in Staunton is $20,686.
  • The average cost in Harrisonburg is $21,283.


  • The average cost in Harrisonburg is $9,208.
  • The average cost in Staunton is $8,242.

Pool Installation

The average cost of inground pool installation is $8,192 in Harrisonburg and $7,242 in Staunton.

The Pros and Cons of Using Renovation Loans

As with any financing decision, there are both benefits and risks to taking on a renovation loan. Our experienced mortgage team can help you weigh the pros and cons of your own situation so you can find the best solution for your home renovation needs.

Weigh the pros and cons of your own situation so you can find the solution for your home renovation needs.


  • Structured payments
  • Begin your project right away
  • Home equity loans usually have fixed rates, meaning your monthly payment is likely to stay the same each month.
  • You can move any unused money from your loan to an interest-bearing account to earn interest.
  • Interest rates for HELOC are low–and usually lower than personal loans or credit cards.
  • The flexibility of choosing what renovation projects to use the loan for


  • If the market value of your home declines, you may end up owing more on your mortgage and home renovation loan than your house could theoretically sell for. However, this is less of a risk if you plan to stay in your home long-term.
  • A home equity loan is a secured loan against your house so if you stop making payments the bank can take possession of your house.
  • The process of applying for a home renovation loan can be as involved and lengthy as applying for a mortgage, depending on the type of financing you choose.

Renovation Loan Options

When it comes to renovation financing, homeowners have many options to choose from. For homeowners in the Shenandoah Valley, F&M Mortgage offers renovation loans with as little as 5% down payment. Are all loan options created equal? Here’s what you need to know:

  • Home Equity Lines of Credit (HELOC): For homeowners who have ongoing renovation projects. A HELOC is a revolving account that can be used, paid back, and used again. Must have enough equity in your home (the difference between its current market value and any mortgage balances you have).
  • Home Equity Loan: A term loan, usually with a fixed rate and predictable monthly payments. Best for homeowners who need to finance just one (bigger) renovation project and want to pay off what they owe over a long period of time. Must have enough equity in your home.
  • Personal Loans: A decent option for homeowners without enough equity to qualify a secured renovation loan. However, an unsecured personal loan will usually have a higher rate. Best for smaller, less expensive projects.
  • Credit Cards: We don’t recommend using credit cards to fund home renovation projects and purchases unless you can re-pay the amount owed within the same billing cycle.
  • Cash-Out Refinance: Replace your existing mortgage with a new loan and get up to 80% of your home’s market value back in cash. Recommended for home improvement projects that add value to your house, but can be used for anything, including non-renovation expenses like college tuition.

New Purchase Renovation/Improvement Loans

A FHA 203k Rehab Loan requires only a 3.5% down payment and a 640 credit score for first-time buyers.

  • FHA 203k Rehab Loan: Requires only a 3.5% down payment and you can receive up to $35k for repairs and renovations. Minimum 640 credit score and available for first-time buyers or refinancing.
  • Fannie Mae HomeStyle Renovation Loan: A combination purchase and renovation loan that provides up to $25k for renovations and improvements.
  • Freddie Mac Renovation Mortgage: Provides permanent financing to replace Interim Construction Financing. Can be used for land purchases, site-built homes, and renovations/repairs to existing homes.
  • VA Renovation Loan: No down payment and no private mortgage insurance.

Virginia Laws and Regulations

Check with your local municipality regarding permitting requirements. Here are two statewide rules to keep in mind as well:

  • Must obtain a permit before starting most large home renovations, and the house must be inspected before obtaining a permit.
  • Must provide the state with building plans, contractor licenses, and other applicable documentation.

Apply for a home equity loan or HELOC today!

Visit a branch near you or Contact Us to get started on your Home Equity Line of Credit with Free Debit Card Today.

Current F&M Bank Customers – Send us a message in Online Banking or Mobile Banking to get started!