Planning · San Francisco
By Solid Bay Construction SF | Updated 2026
With SF renovation projects routinely running $200,000–$1,000,000+, very few homeowners pay cash outright. Here's how the main financing options actually work, and which situations each one fits best.
A HELOC lets you borrow against your home's existing equity as a revolving credit line, drawing funds as needed rather than all at once. This makes it a natural fit for construction, since you draw against it to make milestone payments as work is completed rather than committing to the full loan amount on day one.
A cash-out refinance replaces your existing mortgage with a new, larger one, and you receive the difference in cash to fund the renovation. It makes the most sense when current mortgage rates are at or below your existing rate, or when the project is large enough that a single lump sum is more practical than a draw-based line of credit.
These loans roll the cost of renovation into a single mortgage, based on the home's value after the work is complete rather than its current value — useful when buying a home that needs significant work, or refinancing to fund a major renovation without a separate second loan.
Whichever option you choose, a legitimate contractor's payment schedule should be tied to completed milestones — foundation, framing, rough-in, finishes — not large deposits collected upfront. That structure works cleanly with all three financing paths above, since you're drawing or disbursing funds as the corresponding work is actually done.
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