Looking at a fixer-upper in Florence or the surrounding Shoals area? An FHA 203(k) rehab loan with Honor Home Loans lets you finance the home purchase and the renovation costs in a single mortgage. It’s one of the most efficient ways to buy an as-is home and transform it—without juggling multiple loans or paying upfront for repairs.

Why 203(k) Rehab Loans Are a Smart Choice in Florence, AL

Florence, Muscle Shoals, Sheffield, and Tuscumbia have a mix of historic homes, older neighborhoods, and properties ready for updates. A 203(k) rehab loan gives buyers and homeowners a simple way to renovate without the burden of separate financing. Here’s why the program works so well in The Shoals:

• Expand your home search: Purchase homes that need work and wouldn’t normally qualify for conventional financing.
• Finance repairs affordably: Roll approved renovation costs into your mortgage instead of using high-interest credit or personal loans.
• One loan, one closing, one payment: Combine the purchase and renovation into a single monthly mortgage payment.
• Increase long-term value: Renovations and system upgrades can build equity quickly in Florence’s stable housing market.

What an FHA 203(k) Loan Includes

A 203(k) rehab loan, insured by the FHA, allows you to finance the purchase or refinance of a home and the cost of approved repairs, improvements, or upgrades. It’s ideal for homes needing anything from cosmetic updates to major structural work.

There are two main types:

• Standard 203(k): For major repairs such as structural changes, room additions, foundation work, full system upgrades, or significant renovations.
• Limited 203(k): For non-structural improvements like flooring, paint, windows, basic repairs, or cosmetic changes.

Renovation funds are placed into an escrow account and released in phases as work is completed. After renovations are approved and finalized, you’ll have a fully updated home wrapped into one mortgage.

Who a 203(k) Loan Is Best For in Florence

• Buyers purchasing older homes in Florence, Muscle Shoals, or surrounding communities.
• Homeowners wanting to refinance and renovate their existing property.
• First-time buyers seeking affordability without sacrificing needed repairs or updates.
• Anyone purchasing a home that needs work before it’s move-in ready.
• Buyers who want instant equity growth through strategic renovations and improvements.

How a 203(k) Loan Works with Honor Home Loans in Florence, AL

1. Identify a property and needed repairs. You can purchase a fixer-upper or renovate your current home through refinance.
2. Meet with our Florence mortgage team. We walk you through eligibility, renovation guidelines, and the right 203(k) option for your plans.
3. Gather contractor bids and finalize your renovation plan. Standard 203(k) loans may require a HUD-approved consultant.
4. Underwriting based on the “after-improvement” value. This may allow you to borrow more than the home’s current value.
5. Close and begin renovations. Funds for repairs are held in escrow and released as each phase is completed.
6. Move into your updated home. Enjoy a renovated space financed under one mortgage with one predictable payment.

Popular Renovation Projects in Florence

• Kitchen remodels and appliance upgrades
• Bathroom renovations
• New flooring, paint, and interior updates
• HVAC, plumbing, or electrical system upgrades
• Energy-efficient windows or roofing replacement
• Structural repairs, additions, or reconfigurations
• Modernizing older homes in historic Florence neighborhoods

Disclaimer: The content on this page is based on regulations and information available at the time of posting, but may change without our knowledge. This content is intended for informational purposes only and does not constitute any legal or binding agreement.