Who it is for
- Buyers purchasing a fixer-upper with conventional financing
- Homeowners refinancing to fund major renovations
- Borrowers whose renovation plans exceed FHA 203k limits or scope
- Buyers wanting luxury or non-structural improvements 203k restricts
Typical Fannie Mae HomeStyle Renovation Loans requirements
| Down payment | From 3-5% for primary residences (per Fannie Mae guidelines) |
|---|---|
| Renovation cap | Up to 75% of the after-renovation appraised value |
| Occupancy | Primary, second home, and investment (stricter terms for investors) |
| Contractor | Licensed/insured contractor required; self-help limited |
| Property types | 1-4 unit site-built homes; condos and manufactured with restrictions |
| MI | Private mortgage insurance applies under 80% LTV as with conventional |
Figures are typical market ranges as of October 2026. Actual terms depend on the lender, your credit, the property and the program, and are confirmed on your Loan Estimate or term sheet.
How it works
- Find the property and get contractor bids for the planned renovation.
- The lender orders an "as-completed" appraisal based on plans and specs.
- Close on a single conventional loan covering purchase plus renovation funds.
- Renovation money sits in escrow and is released in draws as work is inspected.
- Work must typically be completed within 12 months.
- One mortgage payment throughout, no separate construction loan.
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Pros and cons
Advantages
- One loan for purchase and renovation at conventional rates
- Higher renovation budgets than FHA 203k limited in many cases
- Covers luxury and non-structural improvements 203k restricts
- No upfront mortgage insurance premium like FHA
Trade-offs
- Stricter credit and income standards than FHA 203k
- Contractor must be lender-acceptable, DIY is heavily restricted
- Draw administration adds complexity vs. a standard purchase
- Investor HomeStyle has tighter LTV and reserve requirements
Documents you’ll need
- Contractor bids and renovation proposal
- Contractor license and insurance
- Plans/specs for the renovation
- Standard income, asset, credit, and ID documents
- Current mortgage statement (refinance)
Fannie Mae HomeStyle Renovation Loans FAQ
HomeStyle vs. FHA 203k, which is better?
HomeStyle is conventional: better for borrowers with strong credit who want higher renovation budgets and fewer property restrictions. FHA 203k is more forgiving on credit and down payment but has stricter property and contractor rules plus FHA mortgage insurance.
Can I do the renovation work myself?
Generally no, HomeStyle requires a licensed, insured contractor for most work. Limited self-help ("sweat equity") may be allowed for minor items with lender approval.
What renovations are not allowed?
The improvements must add value and be permanently affixed. Luxury items are more flexible than 203k, but tear-downs and new construction on vacant land are not HomeStyle projects.
How is the loan amount calculated?
The lender uses the lesser of purchase price plus renovation costs, or the after-renovation appraised value, then applies the maximum LTV for your occupancy and transaction type.
What credit score do I need for HomeStyle?
Typically 620-680 minimum depending on the lender, with better pricing above 700. It is stricter than FHA 203k.
How long do I have to finish the renovation?
Usually 12 months from closing. The lender holds renovation funds in escrow and releases them in draws as an inspector verifies completed work.
Can I use HomeStyle on an investment property?
Yes, but with tighter terms: higher down payment (typically 15-25%), stricter reserves, and the renovation cap still applies.
What does the contractor need to provide?
A detailed bid, proof of license and insurance, references, and sometimes financial statements. The lender must approve the contractor before closing.
Can I include luxury items like a pool?
HomeStyle is more flexible than 203k on luxury improvements. Pools, outdoor kitchens, and high-end finishes are generally allowed if they add value and the appraisal supports it.
Official sources
How Fannie Mae HomeStyle Renovation Loans compare
| Fannie Mae HomeStyle Renovation Loans | FHA 203(k) Renovation Loans | Conventional Loans | Cash-Out Refinance | |
|---|---|---|---|---|
| Best for | Buyers purchasing a fixer-upper with conventional financing | Buyers of fixer-uppers who will live in the home | Buyers with good credit and steady income | Paying off high-interest debt |
| Down payment | From 3-5% for primary residences (per Fannie Mae guidelines) | 3.5% of purchase price plus repair costs | 3% (eligible first-time buyers), 5%+ otherwise; 15–25% on investment property | , |
| Credit | , | 580 under FHA rules; lenders often want 620+ | 620 | , |
| Income docs | , | , | , | , |
Typical ranges, your Loan Estimate or term sheet confirms actual terms.
Coming soon: a 2-minute walkthrough from our loan team.
Related programs
FHA 203(k) Renovation Loans
An FHA 203(k) loan finances both the purchase (or refinance) of a home and the cost of repairing it in a single FHA-insured mortgage, with as little as 3.5% down.
Conventional Loans
A conventional loan is a mortgage not insured by the government that follows Fannie Mae or Freddie Mac guidelines.
Cash-Out Refinance
A cash-out refinance replaces your current mortgage with a larger one and pays you the difference in cash, commonly up to 80% of your home’s value on a primary residence.
Fix and Flip Loans
A fix and flip loan is short-term (usually 12–18 months), interest-only financing that covers most of a distressed property’s purchase price and up to 100% of renovation costs, repaid when you sell or refinance.