Fannie Mae HomeStyle Renovation

Eligible transactions

Fannie Mae currently permits purchase and eligible limited cash-out refinance structures.

Broad improvement scope

Fannie says there is no required improvement and no minimum renovation dollar amount, but improvements generally must be permanently affixed and complete tear-down/reconstruction is not permitted.

Renovation-cost cap

Current Fannie guidance limits renovation cost to 75% of the applicable value basis: for purchases, 75% of the lesser of purchase price plus renovation costs or as-completed value; for refinances, 75% of as-completed value.

Property types

Current guidance includes 1-4 unit principal residences, certain one-unit second homes and investment properties, manufactured homes, and eligible PUD/condo/co-op units subject to specific rules.

Current 75% renovation-cost rule

For purchase, Fannie caps renovation cost at 75% of the lesser of purchase price plus renovation costs or as-completed value; refinance uses 75% of as-completed value. That is a renovation-cost ceiling, not automatically the maximum mortgage.

Pre-approval renovation checklist

Prepare a preliminary scope, rough contractor pricing, structural/nonstructural classification, expected permit needs, occupancy plan during construction, target completion time and likely as-completed value. Identify condo, manufactured-home, ADU, mixed-use or multi-unit characteristics before ordering the appraisal.

Execution checklist

Confirm the lender actively originates the selected renovation product; contractor accepts draw-based payment; required consultant is available; bid matches appraisal scope; permits can be obtained; contingency/change-order process is understood; and borrower has enough non-escrow liquidity for costs the program will not finance.

Primary sources to verify

• HUD — FHA 203(k)
• Fannie Mae — HomeStyle Renovation Eligibility
• Fannie Mae — HomeStyle Costs & Escrows
• Fannie Mae — HomeStyle Refresh
• Freddie Mac — CHOICERenovation
• Freddie Mac — CHOICEReno eXPress

Last reviewed September 15, 2026.

From property tour to closing: the practical sequence

1. Define the scope: separate required repairs, borrower upgrades and structural work. 2. Choose the likely program: compare FHA Limited/Standard 203(k), Fannie HomeStyle or Refresh, Freddie CHOICERenovation/eXPress and any lender-specific alternatives. 3. Price the work: obtain usable contractor bids and identify permits, engineering and consultant costs. 4. Appraise the completed plan: make sure the appraiser is valuing the same improvements the lender is financing. 5. Close and administer: understand escrow, draws, inspections, change orders and completion certification before construction begins.

A renovation mortgage solves a financing problem only when the construction plan is financeable too. The cheapest contractor or highest projected value does not help if the scope cannot be approved, the contractor cannot operate under draws, or the work cannot be completed within the program timeline.