American homes are getting older. According to an analysis of Census Bureau data by Redfin, the typical home bought in the U.S. in 2024 was 36 years old – nine years older than the median age of homes built in 2012.
With prices and interest rates on the higher side, and inventory scarce, older homes that need updating could become the hidden gems for buyers who are open to packaging their home purchase with renovation costs.
We spoke with Skip Schenker, who along with Amy Porter, co-founded the platform Ready4Remodel.com. The platform uses AI to turn an outdated home into a fully remodeled masterpiece right before the buyer’s eyes. The buyer can use images from the listing or even upload their own pictures of any home to give each room an AI makeover.
The platform can then create construction bids, making renovation loans faster and easier.
Ready4Remodel’s mission is to educate the real estate community about renovation financing. Schenker shares his insights into why the time is right for the market to embrace a real estate renovation renaissance, and how his platform is helping to break down barriers.
Why Is There a Stigma Against Older Homes or Those That Need Repair?
Very few buyers, real estate agents, and loan officers know how to navigate the world of renovation financing (or want to), says Schenker. “There are not enough educated real estate agents who know and understand the product, or loan officers who have competence doing the loans. Agents want to close fast and make commission so they will take the path of least resistance,” he says.
As such, most homebuyers, especially first-timers, are generally steered toward turn-key, move-in ready properties that can close quickly, thus locking them out of homes in need of some renovation love.
Other buyers who may be motivated by “as is” property pricing buy such homes at a bargain with a plan to save up and renovate a little at a time. But in some cases, these buyers end up in a regretful “money pit” situation, and their stories can scare off others.
How Does Looking at Run-Down Homes Help Buyers?
For one thing, when buyers broaden their search to homes in need of work, there’s less competition. “You’re less likely to get into a bidding war on a house that has grandma’s flooring,” says Schenker.
In fact, buyers can often negotiate a better deal, or get seller concessions if the home has been sitting for a while. “You can structure a deal where the seller pays closing costs or can pay points towards lowering the interest rate,” says Schenker.
How Can Renovation Financing Change the Game?
A renovation home loan like Fannie Mae HomeStyle or FHA’s 203k loan could help homebuyers by allowing them to update a run-down home before they move in by rolling in and spreading out the cost of renovation into the mortgage. Unfortunately, people either don’t know about this option, or they’re too skeptical or fearful to try it.
How it Works
With renovation loans, the lender bases the loan on the after renovation value (ARV), explains Schenker. “The unique thing is the way the appraisal is done. The appraiser gets a bid from a contractor and uses that bid.” As long as the borrower can qualify for the loan amount, the rest of the loan process follows a very similar path as a regular mortgage.
Once approved, the buyer can get their renovations done before they move in – “and avoid living in a war zone,” says Schenker. Renovation loans can even build in “soft costs,” such as covering the mortgage payment until you move in from your other residence. That way, you’re not paying rent and a mortgage (or making two mortgage payments) while you wait for the work to be completed.
The Benefits of Renovating When You Buy
Wrapping renovation costs into a relatively low-rate mortgage can be more cost effective than taking a second loan or relying on credit to fund home improvement down the road. It can also protect your finances and well-being in other ways.
You can avoid “closing broke.” Most entry-level buyers deplete their savings and have little left for repairs and upgrades. “Then when things inevitably start to break down or you decide you want to replace the nasty flooring, out come the credit cards,” says Schenker. Given that the average credit card interest rate as of May 2025 was 21.16%, debt can become overwhelming fast. On the other hand, a renovation loan from the start lets you build in costs that are amortized over 30 years. This allows you to keep more cash reserves, while also starting you off with an updated home that’s less likely to need emergency repairs.
It can protect your credit health. If you do end up maxing out your credit cards on home renovations at some point, your credit score will take a hit because your credit utilization is too high (a sign to lenders that you are in financial trouble). This matters because if you had thoughts about doing a cash-out refinance to consolidate your debt, if you’ve dropped to a lower credit tier, it can impact your interest rate. “In the mortgage industry, this is called a loan-level price adjustment (LLPA),” says Schenker. “For a cash out refi, you’re already paying a premium interest rate. And if your FICO score is down, you’re paying another LLPA. It’s a double hit.”
You won’t be at the mercy of market trends. Waiting until a later date to fix up your home might sound like a prudent idea, but relying on your future equity could backfire if interest rates go up or your home value decreases. There’s no predicting the housing market, especially a few years out, and you could end in a position where you’re unable to borrow against your home.
You can start out living in the home you want. The few months you may wait to move into your home while it’s renovated can be better than waiting years to save up and make gradual fixes. Schenker describes numerous client examples in which people wait years to do a kitchen or bathroom remodel, for instance, when they could have done it at purchase and enjoyed the upgrades from day one.
Less worrying about the next emergency. “There’s a lot of strain and stress going to sleep every night in a house that you don’t know if the roof is going to leak, or when the furnace is going to break down,” says Schenker. Not to mention that your utility bills may be higher because the house isn’t sealed property. “The psychology of living in a home that’s functional and weatherproof really has an impact on the family.”
You can design a home with your DNA. Homeowners take more pride in their homes if they get to choose everything from the color of the paint, to the style of flooring, countertops, appliances, and fixtures. “They can create a home that’s a reflection of who they are, not what an investor designed,” says Schenker.
There are tax benefits. Mortgage interest is tax deductible, and that includes the portion of your renovation loan that pays for the home repair, says Schenker, whereas loans or credit card interest cannot be deducted.
What Kind of Instant Equity Can Be Built Using Renovation Financing?
Some home renovations are more impactful in terms of home value than others, but Schenker says it’s more important to think about the longevity of the home. (If you’re buying a property as an investment to fix and flip, your priorities might be different.)
For a primary home renovation, focus on the major systems first, says Schenker. “Insulation isn’t talked about enough: dual-pane windows, a good roof, exterior doors, sealing the envelope of the home to protect it from weather,” he says. Next on your priority list should be the foundation and your electrical and plumbing systems. For a modest investment, you can go for longer-lasting raw materials than a typical builder might use on a new construction.
Finally, you have your cosmetic upgrades like kitchen countertops, cabinets, flooring, and paint. “Those things are important, too,” says Schenker, since it’s where your personal style is reflected.
Renovation Financing Can Help Sellers, Too
In July, the typical home spent 58 days on the market, which is 7 days longer than the same time last year. And, delistings in June 2025 were up 38% year to date and 48% year over year, as per the National Association of Realtors’ July 2025 Housing Market Trends Report. For homes that aren’t in the best condition or have outdated features, it can be even more challenging, especially with some federal home loan programs’ strict property standards.
Selling the property “as is” is not a problem when renovation financing is used, however. “Whatever deficiencies the house has for health and safety, as long as those are itemized in the bid, the seller can close as is,” says Schenker. So for instance, while a tripping hazard in a walkway could easily hold up a traditional FHA loan closing, with an FHA 203(k) renovation loan, as long as there’s a plan to resurface that walkway listed in the contractor bid, the loan can close.
What Types of Renovation Financing Are Available?
The first mass market renovation loan program was the Federal Housing Administration (FHA) Section 203(k) Loan Program, which is still popular today. But other loan programs have rolled out their own renovation loan programs over the years as well, including:
The eligibility requirement for these loans are mostly in line with each program’s regular home loan programs. That means that even people without perfect credit or lower incomes have opportunities to pursue a renovation loan.
How Does Ready4Remodel Platform Help?
The real estate and lending community hasn’t yet embraced renovation financing because of the additional steps and time it takes to find a contractor and get a bid, says Schenker. But the Ready4Remodel platform aims to simplify and speed up the process so that it can be completed in as little as 30 days (instead of the typical 45 to 60). “Normally, it can take weeks to get a contractor bid, and you can’t order an appraisal until you have it. Our system generates bids so lenders can order an appraisal in the first week.”
The platform also helps buyers visualize a home’s potential. “If an agent shows a buyer an old house, they may walk in and the house smells funny and the buyers walk out and say they can’t see themselves living in that house,” says Schenker. But the platform allows users to see virtually what a property could look like when fixed up, and how much it would cost.
In fact, home shoppers can type any property address into the “found a fixer” search box and play around with various renovation options using an AI visualizer tool.
From there, users can get an estimated renovation cost as well as what their monthly payment would be with a renovation loan using the property’s list price, the remodeling budget, and their intended down payment amount. “The platform takes the fear out of it for most people. They can visualize, and get an accurate estimate and payment.”
