Financing the purchase of a home when it is in need of extensive repairs can leave buyers feeling lost and without a solution. At MortgageDepot, our team of professional mortgage loan originators has the solution in a Homestyle Renovation loan backed by Fannie Mae.

One loan provides money to buy and renovate

The Homestyle Renovation program offers borrowers the opportunity to avoid unnecessary closing costs usually associated going to closing on a loan to acquire the property and a second closing on a home equity loan to pay for renovations. Fannie Mae combines the needed financing into a single loan that allows borrowers to finance renovations valued at up to 50 percent of the post-renovation appraised value.

Here’s how it works

When borrowers find a home, our mortgage loan officers find a lender offering Homestyle Renovation financing. The lender is shown the improvements the borrowers plan to make, so the appraisal is based on the projected value of the home following completion of the repairs. Borrowers purchasing homes that cannot be occupied during the renovation process may incorporate up to six months of mortgage payments in their financing.

Features of a Homestyle Renovation Loan

The following are some of the unique features of this loan program from FannieMae:

  • Save money with a single closing
  • Loan-to-value based on post-improvement valuation
  • Borrowers may finance any permanent improvement adding value to the property, including swimming pools
  • Up to 3 percent in seller concessions permitted
  • Possible to finance up six months of mortgage payments
  • One- to four-unit primary residences or one-unit investment or second homes are eligible

Borrowers have up to six months after closing on the loan to complete the renovations.

Speak to one of our professional mortgage loan originators for more information about this and other renovation mortgage programs.

Let us look at an example:


  • The borrower has in mind to purchase a home for $500,000.
  • Finds perfect home but needs work done (new kitchen & bathroom).
  • Renovations will cost $75,000.
  • The borrower then realizes they can only afford a home for $425,000 and they will use their savings account to complete the renovation.


  • Borrower has in mind to purchase a home for $500,000
  • Finds perfect home but needs work done (new kitchen & bathroom).
  • Renovations will cost $75,000
  • We as your trusted mortgage advisor, offer the FNMA HomeStyle Renovation Program which will complete the purchase and cover the renovations. We like this program more then a 203k as the cost of funds are cheaper and luxury items can be included (swimming pool, heated sidewalks, upgraded materials, etc.)
  • Borrower keeps their savings account in check or even uses to buy a superior home.

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