Fannie Mae HomeStyle Mortgage: 2025 Guide to Renovate or Remodel With One Loan
Have you been dreaming of a new kitchen, a modern bathroom, or even an inground pool—but don’t want to move or pay out of pocket? The Fannie Mae HomeStyle Mortgage might be your perfect solution.
At Gustan Cho Associates, we help homebuyers and homeowners use the HomeStyle Renovation Loan to upgrade without breaking the bank or dealing with lender overlays. If you want to purchase a property that needs work or enhance your existing residence, this guide will explain how the HomeStyle loan functions, what it includes, and the qualifications required in 2025.
What Is the Fannie Mae HomeStyle Mortgage?
The Fannie Mae HomeStyle Mortgage is a flexible loan that allows you to buy or refinance a house and cover renovation costs all in one go. It’s a great option for your main home, a vacation spot, or even rental properties.
Unlike many renovation loans, HomeStyle gives you the flexibility to:
- Add luxury features like swimming pools, hot tubs, or saunas
- Finance upgrades for energy efficiency
- Make major repairs or remodels
- Bundle everything into one monthly payment
This makes it a powerful alternative to FHA 203(k) or VA renovation loans.
Why Choose a HomeStyle Mortgage Over Other Renovation Loans?
Most renovation loans have limits on what you can do. For example:
- FHA 203(k) doesn’t allow luxury upgrades like pools
- VA renovation loans are only for eligible veterans and their primary homes
- Personal loans and credit cards usually come with higher interest rates.
But with the Fannie Mae HomeStyle Mortgage, you can:
- Use it on a second home or investment property
- Make luxury renovations that add long-term value
- Cancel mortgage insurance once your loan-to-value (LTV) hits 80%
- Lock in lower interest rates than personal or HELOC options.
What Types of Renovations Are Allowed With Fannie Mae HomeStyle Mortgage in 2025?
In 2025, Fannie Mae HomeStyle Mortgage guidelines will be more flexible than ever. You can finance improvements such as:
- Kitchen and bathroom remodels
- Roof or HVAC replacements
- Room additions or layout changes
- Flooring, siding, or windows
- Accessibility features (for aging in place)
- Energy-saving upgrades like solar panels
- Inground swimming pools and spas
- Landscaping and fencing
You cannot use HomeStyle for:
- Building a new home from scratch
- Tear-downs or full reconstruction
- Any repairs that are purely cosmetic and don’t add real value
How the Fannie Mae HomeStyle Mortgage Works
The Fannie Mae HomeStyle Mortgage is an excellent choice if you want to renovate your home. First, you’ll need to get pre-approved for a conventional mortgage with Gustan Cho Associates. Once you’ve sorted that, you can team up with a licensed contractor to assemble a renovation plan and cost estimate. Your loan amount will be based on what your home could be worth after the repairs, letting you borrow up to 75% of that value just for renovations.
The cash for the repairs will be held in a separate escrow account and handed out in parts as the work gets completed. You can also add up to six months of mortgage payments into the loan, giving you a bit more financial breathing room while you’re renovating.
What Documents Do I Need for a Fannie Mae HomeStyle Mortgage?
Whether you’re buying a home or refinancing, you’ll need standard paperwork:
For Purchases:
- Last 60 days of bank statements
- Last 30 days of pay stubs
- Last 2 years of W2s and tax returns
- Valid driver’s license
- Contractor contact information and project plans
For Refinancing:
- All items above, plus:
- Current mortgage statement
- Homeowner’s insurance policy
Your loan officer at Gustan Cho Associates will walk you through every step and help collect everything.
Do I Need a Contractor for a HomeStyle Loan? Can I Do It Myself?
Fannie Mae generally prefers that renovations financed through a HomeStyle Loan be carried out by a licensed and insured contractor. However, homeowners can complete up to 10% of the work themselves. This is permissible if the total cost of the work is under $5,000, or if a full inspection is provided for projects costing over that amount.
Additionally, it’s important to note that the lender must review and approve the proposed scope of work.
You cannot pay the contractor out of your own pocket. All expenses must be paid from the renovation escrow account set up for the loan. This ensures that the funds are used correctly for the renovations.
Down Payment and Loan Limits for Fannie Mae HomeStyle in 2025
The down payment is based on the total cost of the home + renovations.
- Primary residence: As little as 3% down (if first-time buyer)
- Second homes: Minimum 10% down
- Investment properties: At least 15% down
In 2025, conforming loan limits have increased in many areas. For example:
- $766,550 is the new baseline conforming limit
- Higher-cost areas may allow up to $1,149,825
Your total loan—including renovations—must stay within those limits.
Pros of the Fannie Mae HomeStyle Mortgage in 2025
One Loan, One Closing—No Second Mortgage
With the Fannie Mae HomeStyle Mortgage, you simplify your financing process by combining your home purchase or refinance and renovation costs into a single mortgage loan. This means less paperwork and only one closing process, making it more convenient for homeowners.
Luxury Upgrades Allowed (unlike FHA 203k)
The HomeStyle Mortgage allows you to finance high-end renovations and luxury upgrades, providing flexibility to customize your home to your taste. This is an advantage over the FHA 203k program, which has stricter limits on the types of improvements eligible for financing.
Cancelable Mortgage Insurance
Borrowers can cancel mortgage insurance once certain equity thresholds are reached. This feature can help reduce monthly payments and save money in the long term, enhancing the overall affordability of the mortgage.
Use for Primary, Second, or Investment Properties
The Fannie Mae HomeStyle Mortgage is versatile, allowing you to finance your primary residence, second homes, or investment properties. This broad eligibility makes it an attractive option for various real estate investment strategies.
Borrow Against After-Repair Value (ARV)
This mortgage lets you borrow money based on what the property is expected to be worth after you make some upgrades. So, you can get extra cash for improvements without waiting for the work to wrap up and seeing an increase in your home’s value.
Financing for up to 6 Months of Mortgage Payments During Renovations
Homeowners can receive financing to cover mortgage payments while renovations are underway, providing peace of mind and financial support during the remodel. This feature can alleviate the financial burden of dual payments when temporarily living elsewhere or during extensive renovations.
Competitive Interest Rates
The Fannie Mae HomeStyle Mortgage usually has good interest rates, which is great for anyone looking to keep their borrowing costs down. With lower rates, you can save quite a bit over the life of the loan, making it easier to tackle home improvements without breaking the bank.
Cons of the Fannie Mae HomeStyle Mortgage
- It can take 45–60 days or more to close
- Stricter credit and DTI requirements than FHA loans
- Cannot be used for full demolitions
- You must submit a detailed renovation plan before closing
- Requires working with an experienced lender and contractor
That’s why working with a team like Gustan Cho Associates matters—we close loans others can’t.
Fannie Mae HomeStyle Mortgage vs FHA 203(k): What’s the Difference?
| Feature | HomeStyle | FHA 203(k) |
| Property Types | Primary, second, investment | Primary only |
| Credit Guidelines | Stricter | More lenient |
| Max Renovation | 75% of ARV | Limited based on program type |
| Luxury Features | Allowed | Not allowed |
| Mortgage Insurance | Cancelable at 80% LTV | Lifetime MIP (if <10% down) |
How to Apply for a Fannie Mae HomeStyle Mortgage With Gustan Cho Associates
Applying is easy. We handle everything in-house and don’t impose any lender overlays that other banks do.
Here’s how to get started:
- Call or text us at 800-900-8569
- Please email us at alex@gustancho.com
- Or visit www.gustancho.com to apply online
Once you submit your application, one of our licensed renovation loan experts will walk you through every step, from approval to final inspection.
Who Is a Good Fit for the Fannie Mae HomeStyle Mortgage?
You may benefit from a HomeStyle loan if:
- You want to buy a fixer-upper
- You love your home but want to upgrade instead of move
- You want to build wealth through home improvements
- You’re planning a second home remodel
- You’re a real estate investor looking to boost rental property value
Renovation Adds Real Value—Now More Than Ever
Home prices in the U.S. went up by 7.38% from 2022 to 2023, according to the Federal Housing Finance Agency (FHFA). Because there’s still a lot of demand and not enough homes on the market, many homeowners opt to renovate their homes instead of moving.
When you improve your home’s value, you also improve your net worth. And with a HomeStyle loan, you’re doing it smarter—with one payment, one loan, and zero hassle.
Final Thoughts: Why Work With Gustan Cho Associates for Your Fannie Mae HomeStyle Mortgage?
At Gustan Cho Associates, we specialize in helping borrowers whom other lenders deny. Borrowers who need a five-star national mortgage company licensed in 50 states with no overlays and who are experts on Fannie Mae HomeStyle Mortgage, please contact us at 800-900-8569, text us for a faster response, or email us at alex@gustancho.com.
Whether upgrading your current home or buying one with potential, the Fannie Mae HomeStyle Mortgage could be your ticket to building your dream home without breaking your budget.
Frequently Asked Questions About Fannie Mae HomeStyle Mortgage:
Q: What is a Fannie Mae HomeStyle Mortgage?
A: The Fannie Mae HomeStyle Mortgage is a special loan that lets you buy or refinance a home and make upgrades or repairs all in one loan. It’s a great option to fix a house without paying for the work out of pocket.
Q: Can I Use a Fannie Mae HomeStyle Mortgage to Buy a Fixer-Upper?
A: Yes! Many buyers use the Fannie Mae HomeStyle Mortgage to purchase homes that need work. You can roll the cost of repairs into the same loan as your home purchase, making it easier to buy a home that needs fixing.
Q: What Renovations are Allowed with a Fannie Mae HomeStyle Mortgage?
A: The Fannie Mae HomeStyle Mortgage lets you remodel your kitchen, add a bathroom, replace the roof, or even build a swimming pool. It covers upgrades that add value to your home, not just cosmetic updates.
Q: Do I Need to Hire a Contractor, or Can I Do the Work Myself?
A: Fannie Mae prefers you hire a licensed contractor for most of the work. But with a Fannie Mae HomeStyle Mortgage, you can do up to 10% of the repairs yourself—just make sure your lender approves the plan in advance.
Q: How Much do I Need for a Down Payment with a HomeStyle Mortgage?
A: With a Fannie Mae HomeStyle Mortgage, you can put as little as 3% down if you’re buying a primary home and are a first-time buyer. Second homes require at least 10%, and investment properties require 15% or more.
Q: What’s the Difference Between a Fannie Mae HomeStyle Mortgage and an FHA 203(k) Loan?
A: The Fannie Mae HomeStyle Mortgage is great for buying second homes or rental properties. It even lets you add some fancy upgrades like pools. On the other hand, FHA 203(k) loans are only for primary residences and don’t cover those high-end additions.
Q: Can I Use the Fannie Mae HomeStyle Mortgage on a Second Home or Rental?
A: Yes! One of the best things about the Fannie Mae HomeStyle Mortgage is that you can renovate a second home or even an investment property, not just your primary home.
Q: Can I Get Help with Mortgage Payments During Renovations?
A: The Fannie Mae HomeStyle Mortgage lets you cover up to six months of your mortgage payments while your home’s getting a makeover. This way, you won’t have to worry about juggling rent and mortgage payments at the same time.
Q: How Long does Closing on a Fannie Mae HomeStyle Mortgage Take?
A: These loans usually take 45 to 60 days to close because of the extra paperwork for the renovations. Working with an experienced team like Gustan Cho Associates helps avoid delays.
Q: How do I Apply for a Fannie Mae HomeStyle Mortgage?
A: You can apply with Gustan Cho Associates by calling 800-900-8569, texting us, or visiting www.gustancho.com. We’ll guide you through every step of the Fannie Mae HomeStyle Mortgage process.
This blog about “Fannie Mae HomeStyle Mortgage: One Loan, Big Makeover” was updated on August 6th, 2025.
