Your HomeStyle loan amount is driven by after-improved value, eligible renovation costs, occupancy LTV limits, and conforming loan caps — not just the listing price of a fixer-upper.
Unlike a standard purchase mortgage that stops at as-is value, HomeStyle lets the appraiser value the property as if renovations are complete. That projected value, combined with your down payment and LTV cap, sets the ceiling for purchase price plus rehab.
In practice, lenders use the lesser of after-improved value (times max LTV) or acquisition cost plus approved renovation costs. Overbidding on a distressed listing without appraisal support can shrink your rehab budget — or kill the deal.
Ryan and Steve run numbers against contractor bids before you write a rehab-heavy offer so the combined loan still fits conventional guidelines at Luminate Bank.
Exact Fannie Mae caps on after-improved value — your pre-approval confirms reserves and overlays.
| Occupancy | Purchase LTV | Refi LTV |
|---|---|---|
| Primary (HomeReady) | 97% | 97% |
| Primary (standard OO / 2–4 unit / manufactured) | 95% | 95% |
| Second home | 90% | 90% |
| Investment | 85% | 75% |
Up to 97% LTV with HomeReady or 95% standard on purchase; up to 97% HomeReady or 95% on refi — as little as 3–5% down on the combined purchase-plus-rehab amount.
90% LTV on purchase and refi. Expect tighter down payment and reserve requirements before renovation dollars can be escrowed.
85% LTV on purchase, 75% on refi. Rental income may help qualification, but LTV caps leave less room for a large rehab relative to value.
Illustrative only — not a quote. Real numbers depend on appraisal, bids, credit, and current guidelines.
| Item | Amount |
|---|---|
| Purchase price | $220,000 |
| Eligible renovations + contingency | $55,000 |
| After-improved value (appraisal) | $295,000 |
| Combined acquisition + rehab | $275,000 |
| Max loan at 97% of after-improved | ~$286,150 |
| Likely loan ceiling in this example | $275,000 (lesser of cost vs. LTV cap) |
Related HomeStyle guides that affect how much you can finance.
How much cash you need at closing by occupancy type.
How score affects pricing and LTV room on conventional rehab.
How purchase price and rehab combine into one loan.
Credit, DTI, reserves, and renovation feasibility.
Full overview and FHA 203(k) comparison.
Current conforming limits that cap HomeStyle amounts.
HomeStyle typically sizes the mortgage using after-improved value — what the home will be worth when renovations finish. The total loan still cannot exceed purchase price (or refinance payoff) plus eligible rehab costs, subject to LTV caps.
Yes. HomeStyle is a Fannie Mae conventional product, so the combined purchase-plus-rehab amount must fit within conforming (or high-balance) loan limits for your county unless you use a jumbo overlay product.
Lenders often require a contingency reserve inside the rehab escrow for unexpected repairs. That reserve counts toward the renovation portion of the loan — it is not extra cash you receive at closing.
Yes. Primary residences usually allow the highest LTV. Second homes and investment properties require more equity, which lowers the maximum you can finance relative to after-improved value.
Share the listing, rough rehab budget, and occupancy plan — Ryan & Steve will size purchase-plus-renovation against after-improved value.
HomeStyle is a registered trademark of Fannie Mae. All loans are subject to credit and property approval. Program guidelines, LTV limits, and pricing are subject to change without notice and may not be available in all areas. This website is not affiliated with or endorsed by Fannie Mae, HUD, or any government agency. Information is for educational purposes only and is not a commitment to lend.