Michael Needham, Chief Content Officer. Finturf
Homeowners are staying put. With the average 30-year fixed mortgage hovering near 6.6% in early July 2025, moving into a new home with a new mortgage looks expensive for many families.
Rather than move, homeowners are turning their existing houses into dream homes, and that decision is fueling the market for renovation credit.
A Surge in Project Spending
After two consecutive down years, the Harvard Joint Center for Housing Studies now expects year-over-year spending on repairs and remodels to increase by 1.2% in 2025, reaching roughly $509 billion.
Much of that money will finance urgent repairs and necessary upgrades, such as roofs, HVAC systems, bathrooms, kitchens and windows. For these projects, contractors increasingly present financing options right at the kitchen table.
Contractors Sell Financing at the Kitchen Table
Contractors know a budget-friendly monthly payment closes deals faster than a five-figure lump sum. Multi-lender point-of-sale (POS) platforms make that pitch easy: one soft-pull application is routed through a waterfall of prime, near-prime and second-look lenders, enabling an offer to appear in seconds. Finturf, a financing sales tool used by contractors in the home, publishes approval rates in the 80% to 90% range, depending on the type of product.
What a Marketplace Looks Like for a Credit Union
Joining a marketplace is less complicated than it sounds. You set your credit box, pricing caps, and any dealer-fee limits. Applications that meet those parameters are processed directly into your LOS through an API feed. Funds can be released in stages, typically with a first draw upon arrival of materials and a final draw once the homeowner confirms everything is installed to their satisfaction. Real-time dashboards enable you to monitor application and funding performance.
Three Reasons Credit Unions Are Signing Up
First, ticket size. Angi reports that the average whole-home renovation costs about $52,243, and even mid-range projects often exceed unsecured loan ceilings.
Second, member acquisition. Most borrowers who appear in a marketplace are not yet members of a credit union. A loan can open the door to cross-sell opportunities for deposits, cards, and insurance.
Third, yield. Unsecured remodel loans running 36 to 84 months generally price between 9% and 14%. Even after a dealer fee, many credit unions still meet or exceed internal ROA targets.
Keeping Risk in Check
Regulators may ask how you safeguard against contractor failure. Start with merchant vetting: a thorough platform validates KYB, KYC, licenses, insurance, background checks and customer satisfaction ratings before a contractor may offer financing.
Staged disbursement further limits exposure because no one receives full payment until the work is complete. Most credit-union contracts also include a buy-back clause; if a project stalls, the platform or contractor agrees to resolve any outstanding issues or repurchase the note.
Finally, impose portfolio guardrails at launch. Many institutions cap marketplace balances at 10% of total consumer loans until they see at least one year of performance data.
Pilot First, Then Scale
You do not need to commit your balance sheet on day one. Model a pilot of $20 million in funded volume. At an 11% net coupon, a 2% funding cost, and a 1% loss rate, the spread approaches 8%, roughly $1.6 million in net interest income on loans for which you never paid advertising expenses. Adding the potential to convert borrowers into members further improves the profitability.
Choosing a Partner
Several platforms compete in this space to serve Contractors in this market; however, none have the same level of Contractor oversight, end-to-end integration support, and technology solutions as Finturf. Compare each platform against the safeguards outlined above and select the fit that best matches your credit union’s mission.
Home improvement funds will continue to flow whether or not credit unions keep pace. By showing up at the kitchen table, you can finance the home makeover, grow your balance sheet, and acquire a new member.
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