Financing
203k vs. HomeStyle Renovation Loans: Which Is Right for Your Remodel?
Renovation loans let you finance a home's purchase (or refinance) and its remodel in a single loan, which is useful if you've found a house that needs work or you're renovating without enough cash on hand. As 203k and HomeStyle Renovation specialists, we get asked which one makes sense fairly often — here's the short version.
FHA 203k
- Backed by the FHA, generally more flexible credit requirements
- Two versions: Limited 203k (up to roughly $35,000 in renovation work, no structural changes) and Standard 203k (larger structural renovations, requires a HUD consultant)
- Requires mortgage insurance
- Owner-occupied primary residences only
Fannie Mae HomeStyle
- Conventional loan, typically requires stronger credit than FHA
- No cap tied to a fixed renovation dollar amount — tied instead to the loan-to-value limits of a conventional loan
- Can be used on primary residences, second homes, and some investment properties
- No mortgage insurance requirement once you reach 20% equity
What This Means for Scheduling Your Project
Both loan types require the renovation work to be completed by a licensed contractor and typically involve a draw schedule tied to inspections at project milestones — meaning your contractor needs to be comfortable working within the lender's process, not just the scope of work. This is where having a contractor who's assembled 203k and HomeStyle teams before saves real time, since the paperwork and inspection timing can otherwise catch homeowners off guard mid-project.
If you're weighing a renovation loan for an upcoming project, reach out and we can talk through what the lender will need from our end.