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HomeStyle® Mortgages for Real Estate Professionals

HomeStyle Renovation Mortgage

Open up new possibilities for your clients to get that “move-in ready” home they want.

Imagine your client finds a home in the right neighborhood, with perfect schools—but the kitchen is very outdated, or it has two bathrooms instead of the three your client wanted. Or maybe you have a client who's interested in an REO property that is in desperate need of repair. A HomeStyle Renovation mortgage can help your clients turn deal-breakers into customized solutions by giving them an option to finance renovations as part of their mortgage.

HomeStyle Renovation Loan Process


Borrower Selects a Property

  • Buyer finds a property to purchase.
  • Buyer determines list of repairs/renovations.
  • Real Estate Agent completes contract for sale of selected property.


Preps Loan

  • Borrower works with contractor to submit renovation plans to lender.
  • Appraiser determines "as-completed" value.
  • Lender underwrites, approves and closes home purchase.


Lender Manages Funds During Renovation

  • Lender places funds in a custodial account.
  • Contractor begins work and submits request for funds.
  • Lender manages draws based on inspections.


Finalizes Loan

  • Lender orders final inspection and re-appraisal.
  • Title company updates title policy (completion materials).
  • Lender finalizes and submits completion materials and certificate of occupancy to Fannie Mae.
  • Lender certifies project completion.

Determining your customer's buying power

*Renovation costs: Labor (except sweat equity), materials, soft costs, PITI up to 6 months if home is vacated due to renovations, and contingency reserve (up to 15%; minimum 10% on 2-4 unit properties).

Buyer Benefits


Home improvement costs are included in the mortgage, allowing your clients to take upfront draws to begin their renovations and improvements with less worry about spending out of pocket.


Funds are bundled into your client’s purchase mortgage with one application. First-time homebuyers can finance up to 97% LTV. Repeat buyers can also finance up to 97% LTV when HomeStyle Renovation is combined with a HomeReady® mortgage.


Renovation costs can be approved up to the lesser of 75% of the purchase price or as-completed home value and can be used on any project.

More Resources

Talk to your lender partners

Reach out to your lender partners to find out if they offer HomeStyle Renovation mortgages. While any lender can offer HomeStyle Renovation as an option, lenders will need to get special approval to deliver the loan to Fannie Mae prior to project completion.

Key product features

Maximum LTV (1-unit owner‑occupied)

Up to 97%

(See Fannie Mae’s Eligibility Matrix for specific details based on the loan transaction)

Minimum / maximum renovation costs

For Purchase: Limited to 75%* of the lesser of the purchase price plus renovation costs, or the as-completed appraised value

For Refinance: Limited to 75% of the as-completed appraised value

Can be used on ANY project


Can finance accessory units (i.e. in-law suites, basement apartments, etc.)


Applicable to manufactured homes

No structural changes allowed

Allows upfront draws

Up to 50% of material costs

Includes contingency reserve / allowance

Up to 15%; minimum 10% on 2-4 unit properties

Can use ANY contractor / subcontractor for project

Contractors must be licensed only when required by state law

*For manufactured housing, the eligible renovation funds capped at the lesser of $50,000 or 50% of the as-completed appraised value.

Bundle mortgage products for more flexibility and savings

Both HomeStyle Renovation and HomeStyle Energy mortgages may be combined with a HomeReady mortgage, so your low-income borrowers can take advantage of the following features:

  • Better pricing
  • Cancellable mortgage insurance (restrictions apply)
  • Low down payment and flexible sources of down payment, which allows funds to come from gifts, grants, and down payment assistance programs
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