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Ready to start your home buying journey? Apply now and get pre-approved for your mortgage.
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Know the rates, know your options. Start building your homeownership plan today.
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Get a clear picture of your monthly mortgage payment using your rate, credit score, and down payment information.
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About
Homestyle Renovation Mortgage Loan
A Homestyle Renovation loan makes it easy for you to roll your renovation costs into your loan.
Combined Financing
Flexible Property Types
Low Down Payment
Competitive Rates
Fannie Mae HomeStyle Renovation Loan Information
The Fannie Mae HomeStyle Renovation loan allows homeowners to finance both the purchase and renovation of a property with a single loan. To better understand how this loan can help you achieve your home improvement goals, you can start by speaking to one of our seasoned experts.
Eligible Properties
- Condominiums or Co-op units
- Duplex, triplex, or quadplex
- Townhomes
- 1-unit second home
- 1-unit investment home
- 1-unit manufactured home
- Single-family detached home
Down Payment Requirements
- Minimum 5% down payment for most borrowers
- 3% down payment for HomeReady program qualifiers
- 10% for second homes
- Up to 15% for investment properties (25% for refinancing)
- Private Mortgage Insurance (PMI) required if down payment is less than 20%
What's Covered
- Adding new floors
- Building a second (smaller) home on the property
- Kitchen and bathroom remodeling
- Landscaping work
- Mechanical upgrades (e.g., HVAC and electrical)
- Adding a basement, dwelling unit, garage apartment, or suite
Additional Information
Understanding the specifics of the Fannie Mae HomeStyle Renovation loan can help you determine if it's the right choice for your renovation needs.
What's Not Covered
- Building a new property or second home
- Demolishing your home
- Altering more than 50% of a manufactured home's structure
- Temporary improvements (e.g., furniture, moveable storage units)
- Certain landscaping changes
Credit Score and Income Requirements
- Minimum credit score of 620
- Debt-to-income ratio less than 50%
- No upper or lower income limits
- Loan limits up to $726,200 for single-family homes (higher in costly areas)
Interest Rates
Interest rates for HomeStyle loans are typically similar to conventional loans and lower than home equity loans or HELOCs. Rates may vary based on:
- The total amount borrowed
- Your credit score and financial profile
- Current market conditions
Contact Total Mortgage for the most up-to-date rates and personalized quotes.
Frequently Asked Questions
How does the Fannie Mae HomeStyle Renovation loan work?
The Fannie Mae HomeStyle Renovation loan works as follows:
- You apply for the loan through an approved lender.
- The loan amount includes both the purchase price of the home and the estimated renovation costs.
- After closing, renovation funds are held in an escrow account.
- As renovations progress, the contractor submits plans and requests for "draws" from the escrow account.
- The lender inspects the work and releases funds directly to the contractor.
- All renovations must be completed within 12 months of loan closing.
What are the credit score requirements for a HomeStyle loan?
The credit score requirements for a Fannie Mae HomeStyle Renovation loan are:
- Minimum credit score of 620
- Debt-to-income ratio should be less than 50%
For personalized information based on your credit profile, speak with one of our mortgage experts.
How much can I borrow with a HomeStyle Renovation loan?
The amount you can borrow with a HomeStyle Renovation loan depends on several factors:
- The purchase price of the home
- The estimated cost of renovations
- The after-renovation value of the home
- Fannie Mae's loan limits for your area
- The purchase price plus renovation costs, or
- The after-renovation value of the home
- Up to $726,200 for a single-family home in most areas
- Up to $1,089,300 for a single-family home in high-cost areas
Can I use a HomeStyle loan for an investment property?
Yes, you can use a Fannie Mae HomeStyle Renovation loan for an investment property. However, there are some important considerations:
- Higher down payment requirements: Typically 15% for purchases and 25% for refinances
- Stricter qualification criteria: Lenders may have more stringent requirements for credit scores and debt-to-income ratios
- Higher interest rates: Rates for investment properties are usually higher than for primary residences
- Limit on number of financed properties: Fannie Mae typically allows up to 10 financed properties per borrower
For more information on using a HomeStyle loan for investment properties, consult with one of our mortgage experts.
We'll help you find the perfect loan for you.
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