TurkMortgages.com (a team of NEXA Mortgage, LLC) · Ethan Morgan NMLS #2738407 · NEXA Mortgage, LLC Corp NMLS #1660690
Fannie Mae's conventional renovation loan — the flexible alternative to FHA 203(k). Finance a purchase or refinance plus renovations in one conventional loan, on a primary residence, second home, or investment property, with no ongoing PMI at 20% down and even luxury upgrades like pools allowed.
The Fannie Mae HomeStyle Renovation loan finances a home purchase (or refinance) plus the cost of renovations in a single conventional mortgage. It's the conventional counterpart to the FHA 203(k) — but with more flexibility: it works on primary residences, second homes, and investment properties (1–4 units), allows luxury upgrades, avoids ongoing mortgage insurance entirely at 20% down, and carries no upfront mortgage insurance premium. Renovations are financed based on the home's "as-completed" value.
If you have decent credit and want options FHA 203(k) doesn't allow — renovating an investment property or second home, or adding high-end features like a pool — HomeStyle is usually the answer. Stronger credit borrowers also avoid FHA's lifetime mortgage insurance.
Unlike FHA's 1.75% upfront MIP, HomeStyle has no upfront mortgage insurance premium. Conventional PMI applies only under 20% down — and it cancels as you build equity, or never applies at all with 20% down.
Roughly 5% down for primary residences (3% in some scenarios), about 10% for second homes, and 15%+ for investment properties. Investors gravitate to HomeStyle precisely because FHA 203(k) can't be used for rentals.
HomeStyle has no upfront mortgage insurance premium. If you put less than 20% down, conventional PMI applies but drops off automatically as you reach ~78–80% loan-to-value — a key long-term cost advantage over FHA.
Generally any renovation permanently affixed to the property that adds value is eligible. Work must be done by a licensed contractor, completed within about 12 months, with funds released in inspected draws.
Simplified estimate; actual loan is based on the lesser of as-completed value or cost, within the conforming limit, plus contingency reserve. For illustration only — not an offer or approval. Excludes taxes, insurance, HOA, and mortgage insurance.
HomeStyle is a Fannie Mae product handled by conventional wholesale investors. As a NEXA broker I shop them for competitive rates and renovation terms — including investment-property scenarios — and you work with me, not the lender.
When renovating a Texas homestead with financed funds, the work must be properly documented and contractor liens handled under Texas law. As with cash-out, Texas homestead protections are strict — the renovation contract and lien paperwork must be executed correctly, which I coordinate with your title company and contractor.
| Feature | HomeStyle (Conv) | FHA 203(k) |
|---|---|---|
| Min credit | ~620+ | ~580 |
| Min down (primary) | 3%–5% | 3.5% |
| Occupancy | Primary, 2nd, investment | Primary only |
| Upfront MIP | None | 1.75% UFMIP |
| Mortgage insurance | Cancelable; none at 20% | Often life of loan |
| Luxury items (pool) | Allowed | Not allowed |
| Best for | Stronger credit, investment, luxury | Lower credit, lower down |
If your credit is closer to 580 or you want the lowest entry cost on a primary residence, FHA 203(k) may fit better — see that page. I'll model both so you can compare total cost.
Whether it's your home, a second place, or an investment — even with a pool — let's finance the purchase and the upgrades in one conventional loan. No cost, no obligation. English & Turkish.