Renovation loans are a great loan that allows you to buy a destressed home or aged home and make it into the home of your dreams.
These can also be used to refinance your home into your needs instead of having to move into a more suitable home. These are like mini construction loans and will many of the same things as a construction loan.
There are 2 types of renovation loans, conventional and FHA 203k.
Conventional loans usually are the easier renovation loans and cheaper approach for closing costs. These are a little more relaxed on which contractor you are able to use, and inspections are a little less strict.
FHA renovation loans usually require more inspections and causes the closing costs to be significantly higher. These do allow for a lower credit score. You also have to have a HUD approved contractor.