Fannie Mae HomeStyle Loan: Buy and Renovate a Home With One Mortgage

Written by  Rene Bermudez

Written by  Tara Mastroeni

Edited by  Abigail Bassett

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Updated Aug 20, 2025 Content was accurate at the time of publication.

Dreaming of a kitchen remodel or need to tackle major repairs on a fixer-upper? The Fannie Mae HomeStyle® loan lets you buy and renovate a property using just one mortgage.

HomeStyle loans bundle the cost of renovation, repairs and energy improvements into your monthly mortgage, so you’ll have one predictable payment and you won’t have to drain your savings to cover the renovations.

Of course, this convenience comes with additional requirements compared to a traditional mortgage, and it’s not the right fit for every situation. Here’s what you need to know before deciding whether the HomeStyle renovation loan is right for you

How does a Fannie Mae HomeStyle loan work?

The Fannie Mae HomeStyle loan is a mortgage loan that allows borrowers to purchase a home and finance the cost of qualifying renovations, all in one loan. However, the money for repairs isn’t just given to you in one lump-sum payment at closing. Instead, you and your mortgage lender will typically follow this step-by-step process:

Phase 1: Preparation

1. Find a lender: Research lenders and gather three to five loan estimates, so you can choose the one that ffers you the best deal.

2. Select a contractor: You’ll need to find a contractor and work with them to create plans for the renovation.

3. Determine your loan amount: This amount includes the home’s purchase price and the cost of any planned renovations. You and your lender will use plans for the work involved, contractor bids and a home appraisal to come up with this number.

Phase 2: Renovation

4. Buy the property: Your mortgage lender will transfer funds to the seller for the property purchase once you close on the loan. 

5. Put the remaining funds in escrow: The escrow amount should cover the renovation costs, as well as leave a buffer for unexpected costs and an allowance for mortgage payments that come due while you’re unable to live in the home while the work is being completed.

6. Use the funds in installments: Your lender will release payments, known as “draws,” from the escrow account as you complete specific phases of the work.

Phase 3: Repayment

7. Undergo final assessments: Once all the work is done, your lender will order a final inspection and do title research. If there are any funds left in the escrow account, the lender will use them to pay down your principal balance.

8. Start making payments: Now that the work is done and you’re able to live in the home, you’ll start making mortgage payments on the full amount you borrowed.

How do you take out a Fannie Mae HomeStyle loan?

Since Fannie Mae isn’t a lender, you can’t borrow from them directly. If you want to use a HomeStyle renovation loan to finance the work needed on your fixer-upper, you’ll need to find a lender who offers this loan product. 

Start by calling local banks, credit unions and mortgage lenders to ask what products they offer. If one financial institution doesn’t offer the HomeStyle renovation loan, they may be able to recommend another that does.

Unsure where to start? Check out our list of the best lenders of 2025.

After you’ve found a lender that suits your needs, the basic process for getting a HomeStyle loan is the same as getting any other type of loan: You’ll need to apply for the loan and meet basic income, credit and qualifying guidelines (more on that below).

Fannie Mae HomeStyle renovation loan requirements

Credit score and debt-to-income ratios

You’ll need at least a 620 credit score for a Fannie Mae HomeStyle loan, while the maximum debt-to-income (DTI) ratio is 45%. These requirements are more stringent than the 500 score required for the government-backed FHA 203(k) program. 

That said, if your credit score barely makes the cut, be prepared to make a much larger down payment — as much as 25%. If you want to make a smaller down payment, you’ll need at least a 700 credit score. 

Additionally, to be considered for the lowest possible rate on a HomeStyle loan, you’ll need a 780 credit score or higher.

Down payment

The table below reflects how much of a down payment you’ll need for a HomeStyle renovation loan, based on the property type you’re financing and whether you plan to live in the home full time.

You can renovate a one- to four-unit primary home, condo, co-op, planned unit development (PUD) or manufactured home. An important heads-up: You can’t borrow as much for renovations on a manufactured home, and renovations on second or vacation homes and investment properties are limited to one-unit properties.

Property and project requirements

Loan limits

You can borrow up to the conforming loan limits with a Fannie Mae Homestyle loan. The 2025 conforming loan limit for one-unit properties is $806,500 in most of the U.S, but can go as high as $1,209,750 in high-cost areas.

Acceptable property types

You can renovate a one- to four-unit primary home, condo, co-op, planned unit development (PUD) or manufactured home. An important heads-up: You can’t borrow as much for renovations on a manufactured home, and renovations on second homes, vacation homes and investment properties are limited to one-unit properties.

Appraised value

HomeStyle renovation loans require a home appraisal. 

One major perk of the HomeStyle loan is that your loan amount is based on your home’s “as-completed” value, which is an estimate of what the property will be worth once the renovations are complete. This gives you more borrowing power than a traditional mortgage loan, where the appraisal is always based on the “as-is” home value before any planned improvements take place.

Project timeline

Renovations must be completed within 15 months from the date your loan closes.

What kind of improvements does the HomeStyle renovation loan cover?

There are very few limitations on the size and scope of remodeling projects you can complete with a HomeStyle loan. This is in stark contrast to the FHA 203(k) loan program, a government-backed renovation loan that doesn’t allow for luxury improvements like swimming pools or outdoor fireplaces.

Here are some examples of projects you can and can’t finance with the HomeStyle loan:

Examples of renovations you can make with a Fannie Mae HomeStyle loan

Examples of renovations you can’t make with a Fannie Mae HomeStyle loan

What costs can be rolled into the loan amount?

Aside from the costs of buying the property and the renovations themselves, the HomeStyle renovation loan lets you finance a few other costs associated with making home improvements, including:

Financing these costs can help lessen their financial burden by allowing you to pay for them over time instead of upfront. You’ll be expected to pay interest on any amount that you borrow, however, which can make renovating more expensive.

Pros and cons of a Fannie Mae HomeStyle renovation loan

Fannie Mae HomeStyle loan alternatives

If you don’t need all the bells and whistles of the Fannie Mae HomeStyle loan, or if you don’t qualify, here’s a list of other home improvement loans to consider.