Buy and Renovate With HomeStyle®

How Purchase-and-Renovate Works

Four steps from offer to finished remodel — without a separate construction loan.

01

Scope & bids

List repairs and upgrades, then get licensed contractor bids that match what the appraiser will value after completion.

02

Offer & underwrite

Write the offer with HomeStyle financing. Ryan and Steve underwrite credit, income, and LTV against after-improved value.

03

Close with escrow

You close on the purchase. Renovation funds sit in escrow — not as a lump-sum check for you to manage alone.

04

Draws & finish

Contractors are paid as inspections confirm progress. Final inspection clears remaining escrow when work is done.

Why Buyers Use HomeStyle Instead of Cash + HELOC

Paying cash for a fixer-upper and financing repairs later often means two sets of costs, delayed work, and rate risk. HomeStyle folds eligible renovations into the first mortgage so you start with one payment and a clear draw schedule.

•One closing for purchase and approved rehab
•Borrowing power based on after-improved value
•Escrowed funds protect you and the lender
•Cancellable conventional PMI instead of long-term FHA MIP (when you qualify)
•Works for primary, second home, and investment when guidelines are met

What Must Be Ready Before Closing

Detailed contractor bids
Line-item scopes from licensed, insured contractors — not verbal estimates.
After-improved appraisal plan
The appraiser needs enough detail to value the finished home.
Permits & plans when required
Structural work, additions, and major systems often need permit documentation.
Completion timeline
Work must finish within 15 months after closing per Fannie Mae HomeStyle guidelines.

Purchase HomeStyle vs. Refinance HomeStyle

Goal	Typical path
Buy a fixer-upper	Purchase HomeStyle — acquisition + rehab escrow
Already own, want upgrades	Refinance HomeStyle — pay off current loan + rehab
Need cash beyond renovations	Limited cash-out HomeStyle when equity allows
Ground-up new build	Construction loan — not standard HomeStyle

Keep Exploring

Related guides for purchase-plus-rehab financing.

How Much Can I Borrow?

Loan sizing on after-improved value for purchase-plus-rehab.

HomeStyle Down Payment

Cash required when you buy and renovate together.

HomeStyle Refinance

Already own? Roll renovations into a refi instead.

What Improvements Can Be Financed?

Eligible repairs and upgrades for the escrow.

Buy and Renovate (All Programs)

Cross-program purchase-plus-rehab overview.

HomeStyle Program Hub

Full overview and FHA 203(k) comparison.

Frequently Asked Questions

Do I close before renovations start?

Yes. HomeStyle closes like a mortgage — you take title, renovation funds sit in escrow, and contractors are paid as work passes inspection. You typically do not wait to close until the remodel is finished.

Can I live in the home during renovations?

It depends on the scope and local rules. Some projects allow occupancy; others require temporary housing if systems or structure make the home uninhabitable. Build that cost into your plan — it is usually not financed as living expenses.

What if the appraisal comes in low after including rehab?

If after-improved value cannot support purchase price plus renovations at your LTV, you may need a lower offer, a smaller scope, more down payment, or a different program. Ryan and Steve stress-test this before you go under contract.

Is buy-and-renovate different from a construction loan?

Yes. HomeStyle is one conventional closing with a rehab escrow on an existing dwelling. Construction loans typically fund ground-up builds with progressive draws and a different underwriting model.

Can I Use a HomeStyle® Renovation Loan to Buy and Renovate a Home?