HomeStyle Renovation · Licensed in NJ · CT · FL · NMLS #1630225
HomeStyle Renovation — One Loan for the House and the Work
A HomeStyle Renovation loan pays for the house and the work in one conventional mortgage. The appraiser values the property as it will be when your contractor finishes, not as it sits on the day you walk through it, which is why a gutted kitchen stops being the reason the deal dies. Lenders require 620 to start. Primary residences reach 95% loan-to-value with nothing special attached, and 97% if the file follows HomeReady, where the same 620 floor applies, so your score does not have to move when the tier does. Second homes and investment properties qualify too. FHA’s renovation loan does not do that. What holds files up here is underwriting: Desktop Underwriter has to come back Approve/Eligible, manual underwriting is not permitted, and there is no appraisal waiver on this program.
Last updated September 2026 · reviewed by a licensed mortgage broker
To Qualify
Primary 1-Unit
Primary 1-Unit
With AUS Approval
Your Answer Right Here
HomeStyle Renovation Loan: Your Answer Right Here
A HomeStyle Renovation loan is a conventional mortgage that wraps the purchase price of a home and the cost of renovating it into one loan, closed one time, at one rate. Instead of qualifying you off the home’s current beat-up condition, the appraisal is ordered “subject to” completion of your contractor’s repair scope, which means your loan amount is based on what the home will be worth once the work is done, not what it is worth today. On a primary residence, you can borrow up to 95% of that after-improved value for a single unit, or 97% under HomeReady, with 2 to 4 unit primary properties, second homes, and investment properties all eligible at their own loan-to-value tiers. The maximum loan amount on a primary 1-unit property is $832,750. Renovation funds are held back and released as work is completed and verified, and once the last repair is signed off, you are simply a homeowner with one fixed-rate mortgage, not a homeowner juggling a construction loan and a refinance. If you found a house with good bones in the wrong kitchen, or a fixer-upper priced below similar move-in-ready homes, this is very likely the least expensive way to buy it and fix it at the same time. You can review the program’s official Fannie Mae HomeStyle Renovation guidelines yourself, or call 888.958.5382 or apply free and we will walk your contractor bid through it the same day.
Program Guidelines
HomeStyle Renovation Loan Guidelines and Requirements
Below is what the HomeStyle Renovation program actually requires, broken into the three areas that determine your loan amount, your terms, and whether your project and property qualify.
Occupancy and Loan-to-Value Limits
| Occupancy & Units | Max Loan Amount | Max LTV / CLTV |
|---|---|---|
| Primary, 1 Unit | $832,750 | 97% / 97%* |
| Primary, 2 Units | $1,066,250 | 95% / 95% |
| Primary, 3 Units | $1,288,800 | 95% / 95% |
| Primary, 4 Units | $1,601,750 | 95% / 95% |
| Second Home, 1 Unit | $832,750 | 90% / 90% |
| Investment Property, 1 Unit (Purchase) | $832,750 | 85% / 85% |
| Investment Property, 1 Unit (Rate & Term Refi) | $832,750 | 75% / 75% |
On investment property purchases, the entire down payment must come from the borrower’s own funds. * LTV above 95% must follow HomeReady program guidelines, which cap income at 80% of the area median income for the property’s location. Properties in designated low-income census tracts have no income limit at all.
Credit, Underwriting, and Loan Terms
| Requirement | HomeStyle Guideline |
|---|---|
| Minimum Credit Score | Lenders require 620; the same floor applies under HomeReady, so going above 95% loan-to-value does not raise the score you need |
| Underwriting | Must receive an Approve/Eligible finding through Desktop Underwriter; manual underwriting is not permitted |
| Loan Terms Available | 15 and 30 year fixed only — no adjustable-rate, interest-only, or temporary buydown options |
| Maximum DTI | Up to 49.99% with an Approve/Eligible or Accept/Eligible finding |
| Non-Occupant Co-Borrower | Allowed to help you qualify; maximum LTV/CLTV/HCLTV is 95% when their income is used |
| Escrows | Required on loans above 80% LTV; waivers are available in most states below that threshold, subject to state law |
| Mortgage Insurance | Required above 80% LTV from an approved provider; lender-paid monthly MI is not permitted, and two credit scores are required per MI provider guidelines |
Appraisal, Property, and Renovation Rules
| Requirement | HomeStyle Guideline |
|---|---|
| Appraisal Type | Ordered “subject to” completion of the contractor bid, giving an after-improved value; an as-is appraisal is not required |
| Appraisal Waivers | Not permitted on this program |
| Appraisal Age | No older than 12 months at closing with an appraisal update |
| Property Condition | Ratings C1–C4 are eligible as-is; a C5 rating requires further analysis; a C6 rating is ineligible |
| Down Payment Assistance | Not permitted on the HomeStyle Renovation program |
| Manufactured Homes | Primary residence up to 95% LTV, second home up to 90% LTV, investment property not eligible; multi-wide only, single-wide is ineligible |
Guidelines shown are current as of July 2026 and subject to change based on the individual lender, property type, and the borrower’s full file.
Why Buyers Choose It
HomeStyle Renovation Loan Benefits
Most buyers who look at a fixer-upper assume they need two loans: one to buy the house and a second, separate loan for the renovation once they own it. HomeStyle Renovation collapses that into one mortgage, one rate, and one closing, which usually means lower total closing costs than financing the same project as a purchase followed by a home equity loan or personal loan. Because the appraisal is based on the after-improved value, your loan amount reflects the finished home, not the home sitting in front of you with a dated kitchen or a roof that needs replacing. That single difference is often what makes a HomeStyle loan larger, and more useful, than what a buyer could qualify for on a standard purchase mortgage against the same property’s current value.
The program also reaches further than most renovation loans on the market. Second homes and investment properties are both eligible, which is not the case with FHA’s renovation program, so an investor who wants to buy a rental property that needs work, or a family buying a fixer-upper vacation home, has a path that a standard purchase-only conventional loan does not offer. Renovation funds are disbursed as work is completed and verified rather than handed over at closing, which protects both the borrower and the lender, and once the final inspection clears, the loan simply continues as a normal fixed-rate mortgage with no refinance required to remove the renovation piece.
Why This Matters
Why the Appraisal Process Is the Part Buyers Get Wrong
Most buyers who ask about HomeStyle already understand that the loan pays for repairs. Where they trip up is assuming the loan qualifies off the home’s current price, the same way a standard mortgage would. It does not. The appraiser is given your contractor’s bid and, on most files, a consultant’s written specification of the repairs, and the appraisal report is written “subject to” that scope being completed, arriving at what the home will be worth once the work is finished rather than what it is worth sitting on the market today. If the appraiser flags anything else that needs attention, that item has to be added to the contractor bid and either completed before closing or included in the renovation escrow, so the bid and the appraisal need to match line for line before the file can move forward. An as-is appraisal is not required and an appraisal waiver is never permitted on this program, which is different from a standard purchase where a waiver is sometimes an option.
Property condition matters just as much as the renovation scope itself. Homes rated C1 through C4, which covers normal wear and tear like worn flooring, minor plumbing issues, or a few cracked window panes, are eligible to close as-is once the renovation plan addresses them. A C5 rating means the appraiser has to determine whether anything affects the safety, soundness, or structural integrity of the home before the loan can move forward, and a C6 rating takes the property out of eligibility entirely regardless of the renovation budget. This is also not a program for every property type. Single-wide manufactured homes, mixed-use buildings, mobile homes, co-ops, non-warrantable condos, leaseholds, on-frame modular construction, boarding houses, bed-and-breakfast properties, homes not suitable for year-round occupancy, agricultural properties such as farms or ranches, land without road access meeting local standards, and vacant land are all ineligible, so it is worth confirming a property’s eligibility before you write an offer around this program.
HomeStyle Renovation vs. FHA’s Renovation Program
Both programs let you finance repairs into the purchase, but they serve different buyers. FHA’s renovation loan is limited to primary residences, while HomeStyle also allows second homes and investment properties. FHA carries mortgage insurance premiums that typically last for the life of the loan on lower down payment scenarios, while HomeStyle’s mortgage insurance follows standard conventional rules and comes off once you are at or below 80% loan-to-value. HomeStyle runs through Desktop Underwriter, which weighs the whole file rather than the score alone, though lenders require 620 to start. For a buyer who can clear conventional credit standards and wants the property type flexibility, HomeStyle is usually the more efficient path.
HomeStyle Renovation vs. Buying, Then Refinancing Later
The alternative most buyers consider is closing on the home as-is, then taking out a home equity loan, a personal loan, or a cash-out refinance once they own it to cover the repairs. That path usually means two sets of closing costs, a gap of weeks or months where the buyer is living in an unfinished house while the second loan is arranged, and a loan amount based only on the home’s current value rather than what it will be worth after the work is done. HomeStyle Renovation solves all three of those problems in one step, which is why it tends to be the lower-cost and faster option for a buyer who already knows a property needs work before they ever make an offer.
Full Picture
What Determines Whether You Qualify
Here is what actually decides a HomeStyle Renovation approval, across the four areas underwriting reviews most closely.
- Must receive DU Approve/Eligible — manual underwriting not permitted
- At least one reported credit score required per borrower
- Up to 49.99% DTI with strong AUS findings
- Non-occupant co-borrower income allowed, capped at 95% LTV/CLTV/HCLTV
- Primary residence up to 95% LTV on a 1-unit home, or 97% under HomeReady
- Second homes and investment properties both eligible
- Investment purchases require the full down payment from borrower funds
- Down payment assistance is not permitted on this program
- Appraisal ordered “subject to” completion, reflects after-improved value
- Appraisal waivers are never permitted
- Contractor bid and consultant specifications must match the appraisal
- Completion verified with an updated appraisal or completion report
- Condition ratings C1–C4 eligible as-is; C5 needs review; C6 ineligible
- Single family, condo, PUD, and multi-wide manufactured homes eligible
- 2–4 unit primary properties eligible up to 95% LTV
- Mixed-use, co-ops, and non-warrantable condos are not eligible
How It Works
Three Steps From Contract to Closing
Get a licensed contractor’s bid and, where required, a consultant’s written specification of repairs, so we can order the right appraisal from the start.
The appraisal is run “subject to” your bid, giving your loan amount based on the after-improved value of the finished home.
You close on the purchase and the renovation financing together, and funds release to your contractor as each phase of work is completed and verified.
A HomeStyle Renovation loan rewards buyers who bring a real contractor bid to the table early rather than a rough guess. The loan-to-value limits, the underwriting standards, and the property rules are all fixed, but the fact that your loan amount reflects the finished home rather than the one you are standing in during the inspection is usually what turns a house you almost passed on into the house you actually buy.
Before You Start
What Happens After You Apply
- You send the application
A few minutes online. No documents at this stage.
- A licensed loan officer calls you
Someone on our team covering your state.
- We ask for documents and pull credit
Only once you have decided to move forward.
- You get an approval to shop with
Typically back within the hour.
What Clients Say
Real Reviews From Our Clients
Here’s what a few of our clients said about working with Mortgage-World.com.
Common Questions Answered
Common Questions About the HomeStyle Renovation Loan
Related Resources
Renovation Money: Which Route Fits Your File?
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One loan, one closing, and a value that counts the work
Send us the address, your contractor’s bid if you have one, and what you think the finished house is worth. A licensed loan officer runs it against the after-improved value and tells you whether the numbers reach, before you spend anything on an appraisal. If the file needs HomeReady to get there, you will hear that up front rather than three weeks in.
Written and reviewed by Chris Luis, Broker/Owner of Mortgage-World.com, NMLS #1630225. About the author