Conventional loans · Fannie Mae B5-3.2Buying a fixer-upper with a HomeStyle Renovation loan

Fannie Mae's HomeStyle Renovation mortgage lets a buyer purchase a home – or refinance – and include the cost of repairs, remodeling, renovations or energy improvements in one loan. There is no minimum and no list of required improvements; the work should generally be permanently affixed to the property (appliances count as part of a kitchen or utility room remodel), it can finish a new home that is at least 90% complete, and it can add an ADU, garage, recreation room or pool where zoning allows – but not tear the house down and rebuild. Eligible properties: a one- to four-unit principal residence, a one-unit second home or investment property, a manufactured home (non-structural work only), or a unit in an eligible condo, co-op or PUD (interior work, approved by the association). On a purchase, renovation costs cannot exceed 75% of the lesser of the purchase price plus renovation costs or the 'as completed' appraised value (50% for manufactured homes). Renovation costs can include inspections, permits, architect and engineering fees, consultant fees and up to six months of mortgage payments if the principal residence cannot be lived in during the work – but not sweat equity; a 'do it yourself' option for one-unit homes is capped at 10% of the as-completed value. Two- to four-unit properties need a 10% contingency reserve. The work must be finished within 15 months of closing; the funds sit in a renovation escrow account.