This type of financing is used to pay for home remodeling or repairs. With a home improvement loan, the borrower uses the funds to pay their contractor or purchase supplies to complete the work, then pay the loan off over time. A home improvement loan is helpful if you don’t have cash to pay for home improvement expenses upfront. A Home Equity Line of Credit (HELOC) and Home Equity Loans are popular examples for this type of financing, along with the FHA Section 203(k) program as well as Fannie Mae’s HomeStyle Renovation and Freddie Mac’s CHOICERenovation programs.