Renovation loans · 203(k) & HomeStyle®
Buy the house nobody wants. Build the one everybody does.
One loan covers the purchase and the renovation, sized on the finished home's value: FHA 203(k) from 3.5% down, HomeStyle for investors, second homes, and even pools, with your payments financed while the work happens.
Program snapshot
Renovation loans at a glance
- Loans
- one: purchase + renovation
- Sized on
- after-repair value, to 110%
- Down payment
- 3.5% FHA / 3-5% HomeStyle
- Occupancy
- primary, second, investor
- Built in
- contingency + payment reserves
FHA 203(k) and Fannie Mae HomeStyle program guidelines, subject to loan limits and change without notice. Not an offer or approval.
Fixer-uppers are the last affordable houses.
203(k) and HomeStyle are agency programs anyone can offer, but most loan officers avoid them as too complex. Running them well is a specialty, and it's ours.
3.5%
down on home + renovation combined
Buy the worst house, fund the best fix
One loan, one closing, one payment covers the purchase and the entire renovation budget, sized on an as-completed appraisal of the finished home, up to 110% of that value. FHA 203(k) starts at 3.5% down; HomeStyle runs 3 to 5%.
- Purchase and rehab in a single loan
- Appraised on the home it will become
- Up to 110% of after-repair value
100%
of renovation costs, for investors
Investors and second homes welcome
FHA 203(k) is primary-residence only. HomeStyle isn't: investors can buy or refinance a 1-unit rental and finance the full renovation budget, and second-home buyers renovate from 10% down.
- 1-unit investment properties qualify
- Second homes from 10% down
- Purchase or refinance, either works
yes
to pools, ADUs, and outdoor kitchens
The upgrades FHA won't touch
HomeStyle finances the so-called luxury items FHA prohibits: in-ground pools, outdoor kitchens, serious landscaping, luxury patios, plus detached garages, workshops, and accessory dwelling units.
- In-ground pools and outdoor living
- ADUs and detached structures
- Landscaping that changes the property
Built for how renovations actually go
Most loan officers run from renovation files. We run them cold.
Small fix or full gut, both covered
The Limited 203(k) handles non-structural work up to around $35,000 to $50,000, think kitchens, roofs, HVAC, and appliances, with no HUD consultant and faster underwriting. The Standard 203(k) goes all the way: structural repairs, additions, room expansions, and full gut remodels with no renovation cap short of the FHA loan limit.
No paying rent and a mortgage at once
If the home is uninhabitable during construction, up to six months of mortgage payments can be financed into the loan. You live somewhere else while the work happens without carrying two housing bills.
A buffer for what demolition finds
Every budget carries a built-in contingency reserve of 10 to 20% for the surprises behind the drywall. Overruns draw from the buffer instead of triggering a re-underwrite, and unused contingency pays the loan down.
Your contractors, your way
Use up to three specialized licensed contractors, a plumber, an electrician, a roofer, instead of forcing everything through one general contractor's markup. And on HomeStyle, experienced DIY homeowners can self-perform some work in specific cases, with material costs financed into the loan.
From dated listing to done, one loan.
- 1
Find the fixer
Send the property and your renovation wish list. We'll tell you which program fits and what the budget can carry.
- 2
We build the file
Program selection, contractor bids, the as-completed appraisal, and the contingency and payment reserves, structured once.
- 3
Close once, renovate, move in
Renovation funds sit in escrow and pay contractors as work completes. One closing, one payment, no construction loan juggling.
The quick eligibility check.
- Kitchens, roofs, HVAC, and full guts
- Pools and outdoor living (HomeStyle)
- ADUs and detached garages
- Investors: 100% of reno costs (HomeStyle)
- Up to 6 months of payments financed
- 10-20% contingency built in
- Purchase or refinance
New to FHA? The FHA page covers 203(k)'s parent program, and if you're renovating a rental, the investment calculator will pressure-test the whole deal first.
Straight answers
What is a renovation loan?
One mortgage that buys the home and funds the renovation together, with the loan sized on an as-completed appraisal of what the home will be worth after the work. Renovation money sits in escrow and pays contractors through draws as stages finish. One closing, one rate, one payment.
What's the difference between the Limited and Standard 203(k)?
Scope. The Limited handles non-structural projects up to roughly $35,000 to $50,000, cosmetic overhauls, roofs, HVAC, kitchens, with simpler underwriting and no HUD consultant. The Standard covers structural work, additions, and full guts with no renovation cap short of the FHA loan limit, and adds a consultant to keep the project honest.
203(k) or HomeStyle: which one is mine?
203(k) is FHA: primary residences only, 3.5% down, more credit flexibility. HomeStyle is conventional: it adds investors, second homes, and the luxury items FHA prohibits, like pools and ADUs, from 3 to 5% down with strong credit. We quote both side by side so the project picks the program.
Can I do some of the work myself?
Sometimes, and honestly, less often than people hope. The work generally runs through licensed contractors, though you can split it across up to three specialists instead of one general contractor. HomeStyle does allow experienced homeowners to self-perform certain work in specific cases, with materials financed. Bring us the plan and we'll tell you straight what qualifies.
Where do I live while the house is torn apart?
Anywhere but there, without double-paying. If the home is uninhabitable during renovation, up to six months of mortgage payments can be financed into the loan, so rent during construction doesn't stack on top of the mortgage.
What happens when the contractor finds something ugly?
The budget already assumed it. A 10 to 20% contingency reserve is built into every renovation loan for exactly the surprises demolition uncovers. The buffer absorbs overruns without re-underwriting, and if it goes unused, it reduces your loan balance.
Is a fixer-upper actually a good deal right now?
Often the best one on the board. Move-in-ready homes get bid up; the dated house on the same street doesn't. Renovation financing lets you buy the discount, build the house you actually want, and walk in with equity the appraisal already recognized. It's also why agents love working with a team that runs these loans well.
The dated listing is the discount. Take it.
Two minutes to send the property and your wish list. No cost, no obligation, and a quote across 203(k), HomeStyle, and everything between.
Guthix Lending • NMLS# 2672037 · We are not affiliated with or acting on behalf of FHA, HUD, Fannie Mae, or any government agency. HomeStyle® is a registered trademark of Fannie Mae. Renovation budgets, contingency percentages, financed-payment allowances, contractor and consultant requirements, and eligible improvements vary by program and are subject to agency guidelines, loan limits, and change without notice; renovation funds are escrowed and released on inspection. Standard 203(k) projects require a HUD consultant. Figures shown reflect program guidelines at their most favorable. Not all borrowers or projects will qualify. This is not a commitment to lend or an offer of specific terms.