Fannie Mae HomeStyle

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What is a Fannie Mae HomeStyle Loan?

The Fannie Mae HomeStyle loan is a type of mortgage designed for homebuyers and homeowners who want to finance both the purchase (or refinancing) of a home and the cost of its renovation through a single mortgage. The program is offered by Fannie Mae, a government-sponsored enterprise that backs mortgages. Unlike other types of home improvement loans, the HomeStyle loan rolls the cost of home improvements into the mortgage, simplifying the financing process for buyers and existing homeowners.

Who is Eligible?

  1. Homebuyers: Those purchasing a primary residence, second home, or investment property.
  2. Existing Homeowners: Those looking to refinance and renovate their current home.
  3. Property Types: Single-family homes, planned unit developments (PUDs), condos, and multi-unit properties up to four units are eligible.

Features and Benefits

  • One Loan, Two Purposes: Combines the purchase price and renovation costs into a single loan.
  • Flexibility: Can be used for a wide range of renovations, from minor improvements to major structural work.
  • Lower Interest Rates: Typically offers lower interest rates compared to other home improvement loans.
  • Customizable Terms: Fixed and adjustable-rate options are available, and loan terms can span from 15 to 30 years.

How to Apply

  1. Find a Lender: Not all lenders offer Fannie Mae HomeStyle loans. Research and find one that does.
  2. Get Pre-Approved: Pre-approval gives you an idea of how much you can borrow.
  3. Find a Property and Make an Offer: Once pre-approved, you can start hunting for a property that fits within your budget.
  4. Work with a Contractor: You’ll need a detailed proposal from a contractor outlining the scope and cost of renovations.
  5. Appraisal: An appraisal will be conducted to assess the home’s current value and estimated value after renovations.
  6. Final Approval and Closing: If all requirements are met, the loan is approved, and you proceed to closing.

Loan Limits and Costs

  • Loan Limits: The loan amount is limited by either the conforming loan limits set by Fannie Mae or the total cost of the property and renovations, whichever is less.
  • Down Payment: Minimum down payments can vary but are often around 5% for a primary residence.
  • Interest Rates and Fees: Rates can vary by lender and your creditworthiness, so it’s crucial to shop around for the best deal.

Risks and Considerations

  • Complexity: Managing both a home purchase and renovation can be challenging.
  • Contractor Issues: You must work with an approved contractor, and any disputes can complicate the process.
  • Higher Costs: If the renovation goes over budget or time, you may face financial stress.


Fannie Mae HomeStyle loans offer a convenient way to finance both a home and its renovations, but they come with their own set of criteria, benefits, and risks. It’s essential to work closely with your lender and contractor to ensure a smooth process from start to finish. By understanding the ins and outs of Fannie Mae HomeStyle loans, you can make an informed decision about whether this financing option is right for you.


The Fannie Mae HomeStyle Renovation Mortgage is a single-close loan that enables borrowers to finance the purchase of a home and the cost of renovations or repairs. This can include everything from necessary structural repairs to cosmetic updates.

Eligible properties include 1-4 unit principal residences, one-unit second homes, and one-unit investment properties. There are also specific eligibility criteria that the property must meet, and it’s recommended to check with a lender for the most up-to-date information.

HomeStyle loans can finance a wide range of renovation projects, from necessary repairs such as fixing a leaky roof to aesthetic improvements like updating a kitchen or bathroom. However, the renovations must add value to the property and be permanently affixed to the real property.

To qualify, borrowers must meet Fannie Mae’s credit score, debt-to-income ratio, and other underwriting criteria. Additionally, the total cost of the home plus renovations cannot exceed Fannie Mae’s maximum loan limits.

Fannie Mae generally requires that professional contractors complete the work. However, borrowers may be allowed to do some of the work themselves if they can demonstrate the necessary expertise and complete the work in a timely and workmanlike manner.

The funds for the renovation are placed in an escrow account and released as the work is completed and inspected. The exact process and timing can vary, so it’s important to work closely with your lender to understand the specifics.

Renovations typically need to be completed within 12 months of the loan closing.

Yes, the HomeStyle Energy Mortgage is a specific component of the HomeStyle program designed to finance energy-efficiency improvements, water efficiency improvements, and renewable energy features.

Interest rates for HomeStyle loans are generally competitive with other mortgage products, but they can vary based on your credit score, loan-to-value ratio, and other factors. It’s best to check with multiple lenders to find the best rate.

Both loans are designed to help borrowers finance home purchases and renovations. However, the HomeStyle loan is available for second homes and investment properties, while the FHA 203(k) is only for primary residences. Additionally, the HomeStyle loan does not have the same kind of mortgage insurance requirements that FHA loans have.

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