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Find out if Fannie Mae HomeStyle Renovation Mortgage is the right loan for you

What kind of property do you have?

Conventional “Adjustable Rate” Mortgage

Home Equity Loan

Conventional “Adjustable Rate” Mortgage

The amount of home renovation loans are based upon the “after improved value” which is established by a certified appraiser that considers the types and cost of planned renovations. In addition to owner-occupied properties, Homestyle mortgages can be used to improve second homes and investment properties.

The maximum mortgage amounts are based upon a combination of borrower’s credit score, occupancy type, cost of renovation, existing mortgage or acquisition cost, and the fannie mae conforming loan maximum loan amounts. HomeStyle mortgage guidelines allow for a wider variety of acceptable repairs and improvements than with FHA 203K loans, and there no required improvements. Similar to FHA 203K loans, if the cost of repairs exceeds $35,000, the lender may require the use of a Project Consultant to help manage the approval process and disperse funds.

The advantage of fixed rate loan is that the payments are set and do not change over time. The most popular fixed rate term is the 30-Year because the monthly payments are less than the shorter term 15-year fixed since the repayment is spread over 30 years. The HomeStyle Adjustable Rate Mortgage (ARM) is a 30-year loan that has an interest rate and payments that adjust periodically. This ARM has a low starting rate the first year, then the rate and payment adjusts annually based upon the movement of the underlying 1-Year T-Bill index. The advantage of an ARM is that the initial starting payments are often less than fixed rate loans thus making the loan initially more affordable. The Homestyle loan is also available as a 5/1 Hybrid ARM which has an initial fixed rate period for 5 years, and then rolls into a 1-year adjustable rate for the remaining 25 years. After the first 5 years, the rate and monthly principal and interest payment will change annually. The advantage of 5/1 Hybrid ARM is that the interest rate and monthly payment for the initial fixed period is typically lower than the 30-year fixed rate.

Borrower qualification requirements are based upon fannie mae homestyle mortgage loan underwriting guidelines, and are therefore considered more stringent than government loans. In most cases borrowers need to have above average credit scores, good consistent income, and cash reserves. While purchase transaction can have down payments as low as 5%, and refinances can have a minimum of a 10% equity position, the rate and payment terms are available on transaction with at least 20% down payment/equity.

Home Renovation projects can be financed and provide a great return on your investment. Not only you could be adding equity to your home but you will have many options to remodel your home. Whether it is fannie mae homestyle renovation, fha 203k loan, cash outs or personal loans. Check the appropriate home remodel loans for your situation and let Kukun match you with the right loan and right lender.


  • Ability to finance the purchase, or refinance existing loan, plus the cost of renovations and improvements into a single loan.
  • One loan closing and one monthly payment.
  • Broader allowable repairs and improvements – can be used for luxury items like swimming pools.
  • Utilizes fannie mae homestyle renovation loan underwriting guidelines and does not require mortgage insurance on loan-to-values of less than 80%
  • Available in both fixed rate and adjustable rate loans.
  • Can be used for second homes and investment properties.


  • Require good borrower qualifications – good credit, steady income and reserves.
  • Requires full loan application, borrower documentation, appraisal and renovation details which makes longer closing time may take 45 or more days to obtain funds.
  • Extra paperwork and time required to plan and document renovation work and improvements upfront – must have cost estimates, contractors selected before closing.
  • Larger projects require borrower work with Project Consultant.
  • Up front closing cost and fees are higher than similar government loans.

Compare loans

Are you ready to take on your home remodeling project? Compare different types of loans to find the best loan for your home renovation projects. Kukun partnered with trusted lenders to help you find the perfect loan.

Interest Rate

Adjustable – will
change periodically

Fixed–will not change

Fixed – will not change

Monthly Payments

Payment changes when interest
rates changeMonthly interest-only
payments during draw

Fixed for life of loan Full
principal and interest
payment monthly

Fixed for life of loan Full
principal and interest payment

Term (length of loan)

Available terms between 10
years and 30 years

Available terms between
2 years and 7 years

Available terms between 10
years and 30 years

Min & Max Loan Amount

$5,000 to $500,000

$2,500 to $100,000

$5,000 to $500,000

Borrower Qualifications

Requires good credit, good
income and low debt-to-income

Requires excellent
credit,good income and
low debt-to-income

Requires good credit, good
income, and low debt-to-income

Closing Costs and Fees

Lower cost and fees than
conventional and FHA
loans Depending on LTV, may only
require limited appraisal
May have balloon payments and
annual maintenance fees

No fees or very low fees
No appraisal needed May
have early termination
fee in first 12 months

Lower cost and fees than
conventional and FHA loans
Depending on LTV, may
only require limited appraisal
No prepayment fees or balloon

Application, Timeframe and Availability

Limited application 30 days or less
Available through most banks
and credit unions

Short online application
3–5 days Limited

Limited application 30
days or less Available
through most banks and credit unions

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