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Why Buying a Home is the Best Investment

Welcome to The Chris Kennedy Team Mortgage Blog

Honest, local, easy-to-understand mortgage guidance for buyers and homeowners across Sacramento, Placer, El Dorado, and Yolo Counties.

Hi — I'm Chris Kennedy. For years, I've helped first-time buyers, veterans, families upsizing into their forever homes, and seasoned investors navigate one of the biggest financial decisions of their lives: getting a mortgage in the greater Sacramento area.

This blog exists for one simple reason. Most mortgage advice online is generic, confusing, or written by people who've never closed a loan in Sacramento, Roseville, Folsom, El Dorado Hills, or Davis. I wanted to change that.

Every post on this site is written for you — the buyer, homeowner, or veteran trying to make sense of mortgages in a real Northern California market. Real numbers. Real neighborhoods. Real programs that actually work here.

What you'll find on this blog

Whether you're brand new to homebuying or you've owned for decades, you'll find practical, local guidance on every part of the mortgage process. The articles below cover:

For first-time buyers — How to qualify, how much you really need to put down, how to use CalHFA assistance, and how to stop waiting and start owning.

For veterans, active-duty service members, and surviving spouses — Everything you need to know about putting your VA home loan benefit to work in Sacramento, Roseville, Folsom, and beyond. Zero down. No PMI. The benefit you earned.

For move-up buyers and luxury buyers — Jumbo loan strategies for higher-priced markets like El Dorado Hills, Granite Bay, Serrano, and Bass Lake — including how to qualify, what reserves you'll need, and how to compete in luxury bidding wars.

For investors and wealth-builders — How to use FHA multi-family loans (yes, with just 3.5% down) to "house hack" your first investment property, plus the long-term wealth-building strategy that real estate quietly delivers better than almost any other investment.

For buyers in rural and semi-rural areas — A breakdown of USDA loans across Placer, El Dorado, and Yolo counties, where surprisingly large portions of the region qualify for $0-down financing.

For credit-building buyers — How FHA loans help buyers with imperfect credit get into Sacramento-area homes, plus practical credit improvement strategies that actually move the needle.

Why this blog is different

Three things set this content apart:

It's local. Every article names real neighborhoods, real Sacramento-area home prices, and real programs available in Sacramento, Placer, El Dorado, and Yolo counties — not vague national advice.

It's honest. I tell you what works, what doesn't, what the catches are, and when a loan isn't right for you. No high-pressure pitches. No fine print buried at the bottom.

It's actionable. Every post is built so that by the end, you know what to do next — whether that's running numbers, checking eligibility, or starting a conversation.

A little about me

I've spent my career helping Sacramento-area families navigate mortgages — through every kind of market, every kind of loan, and every kind of buyer situation. I've helped:

First-time buyers close with $0–$5,000 out of pocket using FHA + CalHFA strategies
Veterans buy in Sacramento, Roseville, Folsom, and El Dorado Hills with zero down
Move-up families step into luxury markets using jumbo financing
Investors build long-term wealth through smart house-hacking and refinance strategies
Self-employed borrowers other lenders turned away find creative solutions

My team and I serve the entire greater Sacramento region, including:

Sacramento County — Sacramento, Elk Grove, Folsom, Citrus Heights, Rancho Cordova, Antelope, Natomas
Placer County — Roseville, Rocklin, Lincoln, Auburn, Loomis, Granite Bay
El Dorado County — El Dorado Hills, Cameron Park, Placerville, Diamond Springs, Pollock Pines
Yolo County — Davis, Woodland, West Sacramento, Winters, Esparto

If you're buying anywhere in Northern California, there's a good chance we can help.

Start exploring

Scroll down to find articles tailored to your situation. If you're not sure where to begin, here are three good starting points:

First-time buyer? Start with First-Time Homebuyer Programs in Sacramento.
Veteran or active-duty? Start with VA Home Loans: How Veterans Can Buy a Sacramento-Area Home With $0 Down.
Buying in a higher-priced market? Start with Jumbo Loans in El Dorado Hills.

Ready to talk?

Reading is great — but a 15-minute conversation will tell you more about what's possible for your specific situation than any article ever could. No pressure, no obligation, no salesy follow-up calls.

Chris Kennedy | The Chris Kennedy Team NMLS# 971546 Mortgage Lender serving Sacramento, Placer, El Dorado, and Yolo Counties www.thechriskennedyteam.com

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The Chris Kennedy Team specializes in FHA, VA, USDA, conventional, jumbo, and CalHFA loans throughout Sacramento, Roseville, Folsom, El Dorado Hills, Granite Bay, Davis, Woodland, Auburn, Lincoln, Rocklin, Cameron Park, and the surrounding Northern California region. Browse the articles below to learn more — or reach out anytime.

FHA 203(k) and Renovation Loans: How to Buy a Sacramento Fixer and Finance the Work

An FHA 203(k) loan lets you buy a home and finance the repairs in a single mortgage, based on what the home will be worth after the work is done — not what it is worth the day you walk through it. There are two versions: the Limited 203(k), which finances up to $75,000 in non-structural work, and the Standard 203(k), which handles major structural projects with no fixed dollar cap beyond your county FHA limit. For Sacramento’s enormous stock of 1950s and 1960s homes with original kitchens and thirty-year-old roofs, this is often the difference between a house you can buy and a house you can only admire.

The Problem This Solves

You find a solid house in Tahoe Park or South Land Park. Good bones, great street, priced $80,000 below the comps because the kitchen is original, the roof is at the end of its life, and the bathrooms have not been touched since the Carter administration.

A standard loan will not work well here. The appraiser values the home as-is, the lender lends against that number, and you close with no cash left to fix anything. Worse, if the property has health-and-safety issues, the appraiser may require repairs before closing — and the seller has no interest in paying for them.

A renovation loan flips the sequence. The lender underwrites to the after-improved value, funds the purchase, and holds the repair money in escrow, releasing it to your contractor in draws as the work gets done.

Limited vs. Standard 203(k)

Limited 203(k)

Standard 203(k)

Renovation cap

Up to $75,000 (raised from the long-standing $35,000)

No fixed cap — constrained by your county FHA loan limit

Minimum repair cost

None

$5,000

Structural work

Not allowed

Allowed — foundations, additions, load-bearing changes, even converting a single-family home to multi-unit

HUD consultant

Generally not required

Required — the consultant scopes the work and signs off on draws

Contingency reserve

Smaller or none, lender-dependent

Commonly required, and can run as high as 20% of the repair budget

Completion window

Roughly 9 months

Roughly 12 months

Best for

Kitchens, baths, flooring, roofing, HVAC, electrical, windows, paint, appliances, accessibility upgrades

Foundation work, additions, gut renovations, moving walls, major systems replacement

One nuance worth knowing on the Standard version: if you do not spend the contingency reserve, the leftover funds go toward paying down your principal balance. It is not money you lose.

How Much You Can Borrow

Two ceilings apply, and the lower one wins.

• The FHA county limit. For the Sacramento metro area, the 2026 single-unit FHA limit is $763,600. Your total loan — purchase plus renovation — has to fit under it. Multi-unit limits scale up from there.

• The value test. FHA uses the lesser of two calculations: the as-is value plus the cost of renovations, or 110% of the after-improved appraised value.

That second rule is the one that surprises people. If your renovation does not add enough value, the 110% ceiling cuts your budget. A $60,000 kitchen-and-bath project on a home that only appraises $40,000 higher afterward will not fully finance. Talk to your lender about the after-improved appraisal before you finalize a scope of work.

The Rules You Have to Live With

• The home must be at least one year old. This is not a new-construction program.

• Primary residence only. No investment properties, no vacation homes. One-to-four units, eligible condos, and qualifying manufactured homes titled as real estate are all in play.

• Licensed contractors do the work. You generally cannot pay yourself for your own labor out of loan proceeds, and lenders review contractor credentials and bids as part of underwriting.

• Standard FHA mortgage insurance applies — a 1.75% upfront premium plus an annual premium, commonly around 0.55% for a 30-year term with less than 10% down.

• The money is held in escrow and released in draws after inspections. You do not get a check at closing.

program figures

FHA loan limit for the Sacramento–Roseville–Arden-Arcade MSA: $763,600 for a single unit in 2026. HUD publishes new limits each year — update every January along with multi-unit tiers.

The Limited 203(k) cap of $75,000 reflects the increase from the prior $35,000 ceiling. Confirm against current HUD Handbook 4000.1 language before publishing.

MIP figures (1.75% upfront, approximately 0.55% annual) are subject to HUD adjustment.

Confirm current CalHFA program status before referencing the pairing described below — CalHFA offerings change without much notice.

The CalHFA Combination Most Buyers Miss

Here is a genuinely underused stack for Sacramento first-time buyers: CalHFA has historically allowed the Limited 203(k) option to pair with its FHA-insured first mortgage, which in turn can layer with MyHome down payment assistance.

Translated into plain terms, that means it has been possible to buy a fixer with minimal money out of pocket and roll the repairs into the loan at the same time. Roofing, HVAC, electrical, plumbing, kitchen appliances, flooring, decks, fencing, and accessibility modifications have all been eligible under the Limited option.

Program availability and funding change, so this always needs to be verified in real time rather than assumed. But when it lines up, it is one of the strongest first-time buyer structures available in this region.

The Alternatives Worth Comparing

Program

Best Fit

Key Advantage

Key Limitation

FHA 203(k)

Buyers with lower credit scores or limited down payment

Flexible credit, 3.5% down, structural work allowed on the Standard version

FHA mortgage insurance for the life of the loan in most cases

Fannie Mae HomeStyle Renovation

Buyers with stronger credit and some equity

Conventional financing, PMI drops off at 20% equity, allows investment properties and luxury items like pools

Tighter credit and DTI requirements

USDA renovation

Rural-eligible areas of Placer, El Dorado, and Yolo

Zero-down financing on eligible properties

Income limits, geographic eligibility, and a lower repair cap

Cash-out refinance or HELOC

Homeowners already in the property with equity

Simpler process, no contractor draw schedule

Not available on a purchase; requires existing equity

Where This Works Best Around Sacramento

Renovation financing shines in neighborhoods where the land and location are worth more than the structure sitting on it. Around here that means Tahoe Park, Colonial Heights, South Land Park, Oak Park, parts of Del Paso Heights and North Sacramento, older pockets of Carmichael and Fair Oaks, mid-century Citrus Heights and Rancho Cordova, and the original core of Roseville.

It works less well in newer suburban tracts where homes are already updated and the price gap between a fixer and a finished home is too narrow to justify the extra process.

Frequently Asked Questions

How much can I borrow for repairs with an FHA 203(k)?

The Limited 203(k) allows up to $75,000 in non-structural repairs. The Standard 203(k) has no fixed repair cap — it is limited by your county FHA loan limit, which is $763,600 for a single unit in the Sacramento metro in 2026, and by the value test that caps the loan at the lesser of as-is value plus repairs or 110% of the after-improved value.

Can I do the work myself?

Generally no. FHA 203(k) work is performed by licensed contractors the lender reviews and approves. In narrow cases a lender may permit some owner labor with documented experience, but borrowers cannot pay themselves for labor out of loan proceeds.

Can I use a 203(k) loan on a rental property?

No. The 203(k) is a primary residence program. If you want renovation financing on an investment property, the Fannie Mae HomeStyle Renovation loan is the product to look at.

How long does a 203(k) take to close?

Longer than a standard purchase. Contractor bids, the scope of work, and — on Standard files — the HUD consultant’s review all add time before you get to underwriting. Build extra days into your purchase contract and set expectations with the seller up front.

Do I get the renovation money at closing?

No. It is held in escrow and released to your contractor in draws as work is completed and inspected. This protects you as much as it protects the lender.

What is the difference between a 203(k) and a construction loan?

A 203(k) renovates an existing home that is at least one year old and converts to a permanent mortgage automatically. A construction loan builds from the ground up and typically requires a separate permanent loan or a one-time-close structure.

Looking at a Fixer? Price the Renovation Into the Loan First.

The most useful thing you can do before writing an offer on a project house is find out what the after-improved value supports and which version of the program fits your scope of work.

That one conversation determines whether you are looking at a $30,000 refresh or a full gut — and whether the numbers actually work.

Call or text (916) 794-0777 | thechriskennedyteam.com

The Chris Kennedy Team | Reliant Lending | NMLS #971546. Serving Sacramento, Placer, El Dorado, and Yolo counties. This article is for general educational purposes only and is not a commitment to lend, an offer of credit, or financial, tax, or legal advice. Program terms, guidelines, and rates are subject to change without notice. Equal Housing Opportunity.

Chris KennedyJuly 28, 2026Comment

Sacramento Housing Blog