HomeStyle Renovation Loans: Buy, Renovate With One Mortgage

If you’ve been house hunting but haven’t found a place that's affordable and move-in ready, you may consider broadening your search to include fixer-uppers.

A HomeStyle renovation loan from Fannie Mae combines the home’s purchase price with the cost of improvements. This loan covers a wide range of projects, and the home isn’t required to be habitable at the time of purchase. However, all work must be completed within 15 months after the loan closes.

How does a HomeStyle renovation loan work?

Fannie Mae is a government enterprise that designs the guidelines for conventional mortgages, including HomeStyle loans. Fannie Mae doesn’t issue loans; instead, lenders like banks and credit unions finance home loans based on Fannie Mae’s guidelines, then Fannie Mae purchases them from the lenders. This helps the mortgage industry by freeing up capital for lenders to generate more loans. While you can choose among lenders that offer HomeStyle, these requirements and guidelines will be the same.

» MORE: Fannie Mae, explained

Eligible projects and properties

Fannie Mae designed HomeStyle to expand borrowers’ purchasing options to homes that require any number of repairs or renovations. Examples of projects that a borrower might finance with a HomeStyle loan include:

• Kitchen or bathroom remodel.

• New flooring.

• New roof.

• Landscaping.

• Building an addition.

• Adding an accessory dwelling unit.

Types of homes that are eligible for HomeStyle loans:

• One-to-four unit primary residences.

• One-unit second homes or investment properties.

• Manufactured homes.

• A unit in an eligible planned development, condo or co-op.