Fannie Mae

HomeStyle® Renovation Maximum Mortgage Worksheet

Borrower Name:	Date:
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A. Loan Parameters
1. Loan Purpose	Purchase LCOR
2. Occupancy	Primary Second Home Investment
3. Number of Units	1 Unit 2 Units 3 Units 4 Units
4. Manufactured Home	No Yes
5. HomeReady® Loan	No Yes
6. First-Time Homebuyer	No Yes
7. Rate Type	Fixed (FRM) ARM
8. Credit Score (mid-score)	760 or higher 740 – 759 720 – 739 700 – 719 680 – 699 660 – 679 640 – 659 620 – 639
9. Down Payment %	0% — program maximum LTV 3% 5% 10% 15% 20% 25% 30% 40% 50%
Maximum LTV / CLTV / HCLTV
Applicable LTV (used for loan amount)

B. Property Information
1. Purchase Price
2. LCOR: Payoff of Loans on Property
3. Estimated "As Completed" Appraised Value

LCOR = Limited Cash-Out Refinance (rate-and-term). Pays off the existing first lien, closing costs, prepaids and renovation costs only. HomeStyle does not permit cash to the borrower.

C. Renovation Costs
1. Alterations, Improvements, and Repairs
a. Hard Costs (Labor / Materials)
b. Contingency Reserve (if applicable and financed)	%
Optional on a 1-unit property. If left blank, the contingency is borrower-funded.
c. Architect / Engineer Fees
d. Consultant Fees
e. Inspections
f. Title Updates
g. Permits
h. Draw Management Fee
i. Certification of Completion (1004D)
j. Payment Reserve (6 months maximum)
k. Other Costs
2. Total Renovation Costs (C1a–C1k)

Renovation cap: —

D. Loan Amount
1. Total of Purchase Price and Renovation (B1 + C2)
2. Estimated "As Completed" Value (B3)
3. Purchase Mortgage Loan Amount [Lesser of D1 or D2 × Applicable LTV]
4. LCOR Mortgage Amount (lesser of B3 × Applicable LTV or Total Obligations)

E. Details of Transaction	Purchase	LCOR
1. Purchase Price (B1)
2. Renovation Costs (C2)
3. Payoff of Loans on Property (B2)
4. Closing Costs, Prepaids and Escrows
5. Discount Points
6. Total Due from Borrower
7. Total Mortgage Loans
8. Seller Credits
9. Other Credits
10. Total Credits
11. Cash from Borrower / Cash to Close

F. Estimated Monthly Payment
1. Loan Term	30 Years 25 Years 20 Years 15 Years 10 Years
2. Interest Rate (%)
3. Loan Amount (from D4 or D5)
4. Monthly Principal & Interest
5. Annual Real Estate Taxes
6. Monthly Real Estate Taxes
7. Annual Hazard Insurance
8. Monthly Hazard Insurance
9. LTV Used for PMI
10. PMI Factor (Annual %)
11. Monthly PMI
12. Total Monthly Payment (PITI + PMI)

PMI factors are drawn from the standard Fannie Mae rate sheet. Actual PMI rates vary by lender. PMI is not required when LTV is 80% or below and may be cancellable based on the as-completed value.

Fannie Mae HomeStyle® Renovation

Loan Requirements, LTV Limits, and Program Rules

The Fannie Mae HomeStyle® Renovation mortgage is a single-close conventional loan that combines the purchase or refinance of a home with the financing of repairs, renovations, and improvements. Instead of taking out a separate construction loan and then refinancing into a permanent mortgage, the borrower closes once on a loan sized against the property's as-completed value.

Because the loan is delivered to Fannie Mae, it follows conventional underwriting — the same credit, income, and debt-to-income standards that apply to any standard conventional mortgage. What makes HomeStyle Renovation different is the renovation component: how it's budgeted, how it's disbursed, and how it affects the maximum loan amount.

Maximum LTV / CLTV / HCLTV by Occupancy and Property Type

The LTV is calculated against the lesser of the total acquisition-and-renovation cost or the estimated as-completed value. Maximum ratios vary by occupancy, unit count, loan purpose, and rate type:

Occupancy	Units	Loan Purpose	Max LTV (FRM)	Max LTV (ARM)
Primary Residence	1	Purchase / LCOR	97%*	95%
Primary Residence	2	Purchase / LCOR	95%	95%
Primary Residence	3–4	Purchase / LCOR	95%	95%
Second Home	1	Purchase / LCOR	90%	90%
Investment Property	1	Purchase	85%	85%
Investment Property	1	LCOR	75%	75%
Manufactured Housing — Primary	1	Purchase / LCOR	95%	95%
Manufactured Housing — Second	1	Purchase / LCOR	90%	90%

Manufactured housing is limited to 1-unit properties. Structural changes are not permitted on manufactured homes. Renovation funds are capped at 50% of the as-completed value (see renovation cap section below).

Renovation Cost Cap

Total renovation costs cannot exceed 75% of the lesser of the purchase price plus renovation costs, or the as-completed appraised value for purchase transactions; and 75% of the as-completed appraised value for refinance transactions. For manufactured housing, the cap is 50% of the same bases.

Fannie Mae removed the previous $50,000 renovation cap for manufactured homes effective with Announcement SEL-2025-10 (December 10, 2025). The cap is now purely percentage-based.

If the contingency reserve is not financed because the borrower funds the reserve, it does not need to be included in the total renovation costs toward the 75% limit. Borrower-provided funds for all other costs cannot be subtracted before calculating the 75%.

Contingency Reserve

A contingency reserve is not required for a mortgage secured by a one-unit property, though the lender may choose to establish one. For a mortgage secured by a two-to-four-unit property, a contingency reserve equal to 10% of the total costs of the repairs and renovation work must be established and funded. The lender may increase the reserve to 15% if it determines the higher reserve is appropriate given the scope and scale of the renovation.

The base for the 10% calculation is all renovation-related costs — labor, materials, fees, permits, plans and specifications, inspection costs, and other expenses related to the renovation — excluding the contingency reserve itself and the payment reserve. Including the reserve in its own base would create a circular calculation, and the payment reserve is an escrow for mortgage payments rather than a cost of the work.

On the worksheet, that base is every line in Section C except C1b (the contingency itself) and C1j (the payment reserve). The calculator auto-fills the reserve at 10% for 2–4 unit properties and recalculates as you enter other costs. If the lender requests a higher reserve for a complex project, enter the higher percentage — the dollar amount updates automatically.

Eligible Improvements

There are no required improvements and no restrictions on the types of renovations allowed. There is no minimum dollar amount for renovations. Generally, improvements should be permanently affixed to the real property, with the exception of certain appliances installed with kitchen and utility room remodels.

• Structural repairs and modifications
• Kitchen and bathroom remodels
• Roofing, siding, windows, and exterior improvements
• HVAC, plumbing, and electrical system upgrades
• Flooring, drywall, painting, and finish work
• Energy-efficiency improvements and insulation
• Accessibility modifications
• Landscaping, driveways, and permanently affixed outdoor structures
• Well and septic repair or replacement
• Basement finishing and attic conversions
• Accessory dwelling units (ADUs), in-law suites, basement apartments
• Swimming pools (permanently affixed, subject to local zoning)
• Garages, recreation rooms, and other allowable structures

HomeStyle Renovation may be used to complete the final work on a newly built home when the home is at least 90% complete. The remaining improvements must be related to completing non-structural items the original builder was unable to finish.

Ineligible Improvements

HomeStyle Renovation may not be used for complete tear-down and reconstruction of the dwelling. A tear-down would include removing the entire shell of the dwelling down to the foundation. Funds cannot be used to pay off existing debt or special assessments.

Financed Fees and Soft Costs

Beyond hard construction costs, HomeStyle Renovation allows a defined set of soft costs to be financed as part of the renovation budget:

• Contingency reserve (if financed — see contingency reserve section)
• Architect and engineering fees
• Consultant fees
• Inspection fees
• Title updates
• Permits
• Draw management fee
• Certification of completion (1004D)
• Payment reserve — up to 6 months of PITI if the home is not occupied during construction

Standard closing costs and prepaid items — origination fees, appraisal, title insurance, prepaid interest, escrow deposits — are not financed. They are paid by the borrower at closing or offset by seller credits and lender credits.

How the Draw Process Works

Renovation funds are held back at closing in a custodial account and released in draws as work is completed and inspected. The lender manages all project draws and oversees the renovation process. Borrowers do not handle renovation funds directly.

1. The borrower closes on the loan. Funds for the renovation are placed into a custodial account.
2. Work begins according to a draw schedule agreed to at closing.
3. After each phase is complete, an inspector verifies the work.
4. The escrow agent releases the corresponding draw to the contractor.
5. This repeats until the project is complete.
6. A final inspection (1004D) confirms completion, and any remaining funds are used to reduce the unpaid principal balance.

Renovation work must be completed no later than 15 months from the date the loan is closed. In rare circumstances, an extension not to exceed 18 months may be granted.

HomeReady® Combination

HomeStyle Renovation can be combined with HomeReady, Fannie Mae's low-down-payment conventional program. The combination does two things:

• Raises the maximum LTV to 97% for 1-unit principal residences (3% down)
• Brings HomeReady's mortgage insurance terms

HomeReady has its own income limits and, in most cases, a first-time-homebuyer requirement. However, the purchase-transaction first-time-homebuyer rule does not apply to HomeReady/HomeStyle combos in the 95.01–97% LTV range.

Manufactured Housing — MH Advantage® vs. Standard MH

Fannie Mae issues an MH Advantage® sticker to the manufacturer, who applies it at the factory. It is usually found inside the home next to the HUD Data Plate. Freddie Mac's CHOICEHome® label counts the same way.

If the home has an MH Advantage sticker or CHOICEHome label — choose MH Advantage. Fixed rate reaches 97% LTV on a 1-unit primary residence, the 0.50% manufactured housing price adjustment is waived, mortgage insurance coverage is the standard level, and the appraiser may use site-built comparable sales.

If not — choose Standard MH. The maximum is 95% on a 1-unit primary residence, fixed or adjustable, and 90% on a second home (multi-width only).

A home cannot earn the MH Advantage designation later. There is no retrofit and no inspection that grants it. When in doubt, choose Standard MH and have the appraiser confirm the sticker on the Manufactured Home Appraisal Report (Form 1004C) before pricing the loan at 97%.

Eligible Transaction Types

HomeStyle Renovation is available for:

• Purchase transactions — buying a home that needs work and financing the renovation in the same loan
• Limited Cash-Out Refinance (LCOR) — refinancing an existing mortgage while adding renovation costs to the new loan. LCOR pays off the existing first lien, closing costs, prepaids and renovation costs only. HomeStyle does not permit cash to the borrower.

Full cash-out refinancing is not permitted under HomeStyle Renovation. The borrower may not receive cash back at closing in any amount. The standard limited cash-out refinance allowance of 2% or $2,000, whichever is less, is not permitted for this product.

In LCOR transactions, the loan amount is capped at the lesser of the LTV-derived maximum or the total obligations being refinanced — the sum of the existing lien payoff, renovation costs, closing costs, prepaids, and discount points. Lending above that total would constitute cash to the borrower, which HomeStyle prohibits.

Lookup Tools and Income Guidelines

Two Fannie Mae lookups are useful before you commit to this program. The first confirms whether your existing loan is Fannie Mae-owned (relevant for LCOR). The second confirms the loan limit and area median income for your county, which drive eligibility for HomeReady and the maximum conforming loan amount.

Fannie Mae Loan Lookup — verify existing loan ownership.
Before relying on 97% LTV in an LCOR transaction, confirm the existing first mortgage is owned or securitized by Fannie Mae. If it is not, the maximum LTV drops to 95%.
Fannie Mae Loan Lookup Tool

Conforming Loan Limit and Area Median Income Lookup.
Conforming limits and HomeReady income limits are set county by county and updated annually. Enter the property address to see the applicable limit and income ceiling for the area.
Quick Loan Limit Lookup  |  FHFA Conforming Loan Limits

Monthly Income Guidelines.
HomeStyle Renovation does not set its own income thresholds. It follows the income standards of whichever conventional product it is combined with:

• Standard HomeStyle Renovation — no income limit. Qualification is based on credit, DTI, reserves, and the standard conventional underwriting standards.
• HomeStyle + HomeReady — borrower income cannot exceed 80% of the area median income (AMI) for the property's location. For properties in low-income or high-minority census tracts, there is no income limit.
• HomeReady in a designated disaster area — the AMI limit may be waived for a period following a federally declared disaster.

Income is measured on the borrower's qualifying income as documented in the loan file. For HomeReady, all borrowers on the loan are counted, regardless of whether they will occupy the property. Rental income from the subject property may be used if documented per Fannie Mae guidelines. The general conventional debt-to-income ceiling is 45%; higher DTIs may be considered with compensating factors and automated underwriting approval.

Verify current income limits and AMI figures for your county before relying on HomeReady eligibility. Limits are published annually by Fannie Mae and are available through the lookup tools above.

Timeline

Because HomeStyle Renovation involves an inspection and draw process, the timeline is longer than a standard conventional mortgage. Typical phases:

• Application, documentation, and contractor bids: several weeks before closing
• Appraisal with as-completed value: adds time versus a standard appraisal
• Closing: single close, no separate construction loan payoff
• Renovation period: typically up to 15 months, extendable to 18 months in rare cases
• Final inspection and conversion to standard servicing

Frequently Asked Questions

Can I do the work myself?
Borrowers can perform renovation work themselves at the lender's discretion, provided that: the do-it-yourself financing does not exceed 10% of the as-completed value; the property is a one-unit owner-occupied home and not a manufactured home; and reimbursement is limited to the cost of materials or properly documented contract labor (sweat equity may not be reimbursed). Inspections are required for all work items that cost more than $5,000.

Must the property be habitable at closing?
No. Fannie Mae does not require the property to be habitable at the time of closing. If the home is not habitable, the borrower may finance up to six months of principal, interest, tax, and insurance payments to cover these costs while the home is uninhabitable.

Are tear-downs allowed?
No. HomeStyle Renovation loans may not be used to tear down and reconstruct a home. Major renovations such as additions or multi-room rehabilitations are eligible, provided they meet the applicable LTV requirements.

Can I buy a foreclosure or fixer-upper?
Yes. That is one of the primary uses of the program. The property must be habitable or capable of being made habitable through the planned renovation.

How is the interest rate set?
HomeStyle Renovation is priced like a standard conventional mortgage, not like a construction loan. Rates depend on the borrower's credit, LTV, occupancy, and loan term.

What loan terms are available?
Fixed-rate and adjustable-rate terms are available in standard conventional maturities — typically 15 and 30 years.