A conventional renovation loan with fewer limits on what, and where, you renovate.
HomeStyle Renovation is a conventional Fannie Mae loan that combines the purchase or refinance and the renovation into one mortgage, based on the as-completed value. Ken Clark Jr. helps buyers, homeowners, and investors in Sacramento, Northern California, New Jersey, and nationwide where licensing permits use HomeStyle through PRMG programs.
Short answer: it is a conventional Fannie Mae mortgage that rolls the home and the renovation into one loan, sized on the value after the work is done.
Renovation funds are placed in a custodial account at closing and released as work is completed, with the lender managing draws and inspections. Because it is a conventional loan, it follows Fannie Mae credit and pricing rules rather than FHA's.
Short answer: nearly any permanent improvement that adds value, including repairs, remodels, additions, landscaping, and luxury items.
Fannie Mae does not set a minimum renovation amount, although program guidelines may (commonly $5,000). Renovation costs can be up to 75 percent of the lesser of the purchase price plus renovation costs or the as-completed appraised value. For manufactured homes, renovation funds are capped at 50 percent of the as-completed value.
PRMG HomeStyle guidelines. All work must be completed by a hired contractor; do-it-yourself work is not eligible. Adding a separate unit, such as converting a single-family home into a 2 to 4 unit property, is not eligible. Planning an accessory dwelling unit? Ask first so we can review your specific plan. Work is commonly expected to be completed within about six months.
Short answer: borrowers who meet Fannie Mae conventional credit, income, and debt-to-income guidelines for the property type and occupancy.
| Requirement | HomeStyle Renovation |
|---|---|
| Down payment | As little as 3% on an eligible one-unit primary residence with a fixed rate (97% LTV). Higher for second homes and investment properties. |
| Credit | Conventional guidelines; 620 is the common Fannie Mae floor, and pricing improves at higher scores. Lender requirements may be higher. |
| Occupancy | Primary residence, second home, or investment property, subject to guidelines |
| Homebuyer education | Required for at least one borrower above 95% LTV when all occupying borrowers are first-time buyers |
| Mortgage insurance | Borrower-paid PMI when under 20% down; can be cancelled once equity requirements are met |
HomeStyle can also be combined with HomeReady for eligible primary-residence buyers. See conventional loans.
Short answer: no. Do-it-yourself work is not eligible on PRMG HomeStyle loans. All work must be completed by a hired contractor under a fixed-price bid.
Fannie Mae allows limited DIY work in some cases, but PRMG's HomeStyle program requires a contractor for all work. If you want to do part of the project yourself, plan to do it after the renovation loan work is complete and paid from your own funds.
Short answer: Fannie Mae does not require the home to be habitable at closing. If it is not livable, up to six months of principal, interest, taxes, and insurance may be financed while the work is done.
That can make a major renovation workable while you keep paying rent elsewhere.
Short answer: HomeStyle usually fits stronger credit, second homes, investment properties, and luxury items. The FHA 203(k) usually fits owner-occupants who need FHA's lower credit threshold.
| HomeStyle | FHA 203(k) | |
|---|---|---|
| Occupancy | Primary, second home, investment | Primary only |
| Minimum down | 3% (eligible one-unit primary, fixed rate) | 3.5% with 580+ credit |
| Luxury items | Eligible | Not eligible |
| Minimum repair | May apply (commonly $5,000) | $5,000 on Standard |
| DIY | Not eligible; hired contractor required | Generally no |
| Mortgage insurance | Cancellable PMI | FHA MIP, often life of loan |
Full comparison: FHA 203(k) vs HomeStyle.
Educational illustration only. Not an actual client, loan offer, or commitment to lend.
A buyer in Roseville with strong credit finds a $610,000 home and wants a $120,000 renovation: a new kitchen, a primary suite addition, and a backyard pool. HomeStyle may finance the purchase and the renovation together on a conventional loan, with renovation costs within 75 percent of the lesser of the $730,000 total or the as-completed value, and PMI that can be cancelled later. Permits and program guidelines apply.
Answered by Ken Clark Jr., Certified Mortgage Advisor. Program availability and requirements vary and are subject to change.
It is a Fannie Mae conventional mortgage that finances the purchase or refinance of a home plus renovation costs in one loan, based on the as-completed value.
As little as 3 percent on an eligible one-unit primary residence with a fixed rate (97 percent LTV). Second homes and investment properties require more.
Yes. HomeStyle permits second homes and investment properties, subject to Fannie Mae guidelines. HomeReady HomeStyle combinations are limited to primary residences.
HomeStyle follows conventional guidelines. 620 is the common Fannie Mae minimum, with better pricing at higher scores. Lender requirements may be higher.
Renovation costs can be up to 75 percent of the lesser of the purchase price plus renovation costs or the as-completed appraised value. Manufactured homes are capped at 50 percent.
Fannie Mae does not set a minimum, but program guidelines may, commonly $5,000.
Yes, luxury items such as a pool may be eligible when permanently attached and supported by the as-completed value.
Adding a separate unit, such as converting a single-family home into a 2 to 4 unit property, is not eligible. Ask before planning an accessory dwelling unit so we can review your specific plan and local zoning.
No. PRMG HomeStyle loans require all work to be completed by a hired contractor. Do-it-yourself work is not eligible.
A contractor is generally used and is subject to lender review. Some programs require a single licensed general contractor under a fixed-price bid.
Fannie Mae does not require the home to be habitable at closing. Up to six months of principal, interest, taxes, and insurance may be financed if it is not.
Yes. Borrower-paid private mortgage insurance can be cancelled once equity requirements are met under federal rules.
Yes. HomeStyle can be used to refinance and renovate a home you already own, subject to Fannie Mae guidelines.
Guidelines change. Verify current program requirements with Ken Clark Jr. before relying on them for a transaction.
Disclaimer: This content is for educational purposes only and is not a commitment to lend, a guarantee of approval, or a rate quote. Loan programs, down payment requirements, terms, and eligibility depend on borrower, property, project, builder, and program qualifications, are subject to underwriting, and vary by state. Not all applicants or projects will qualify. Builder registration is a documentation review for program eligibility and is not an endorsement of any builder. Equal Housing Opportunity. Paramount Residential Mortgage Group, Inc. (PRMG), NMLS #75243. Ken Clark Jr., NMLS #225375. PRMG is licensed in 49 states, excluding New York.
Certified Mortgage Advisor and Branch Manager at PRMG Mortgage (NMLS #75243). 28 years in mortgage lending. Specializes in FHA, VA, conventional, DPA, jumbo, Non-QM, renovation, and construction financing for buyers and investors in Sacramento, New Jersey, and nationwide. PRMG is licensed in 49 states, excluding New York. Three-time Gold Award winner for Highly Reviewed Mortgage Team in Sacramento (2023, 2024, 2025). NMLS #225375.
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