Can you buy a fixer-upper with a conventional loan?
Yes. A standard conventional loan wants a home that's livable as-is, but HomeStyle Renovation, Fannie Mae's renovation mortgage, is built for the house that isn't there yet: it finances the purchase and the renovation together, in one loan with one closing and one monthly payment.
Here's why that matters. Without a renovation loan, a fixer-upper buyer faces an ugly sequence: buy the house with one loan, then fund the work with savings, a credit card, or a second loan against equity the home doesn't have yet. HomeStyle skips all of that by qualifying the deal against the as-completed value, what the home will appraise for once the planned work is finished, instead of its current condition. The same structure works as a refinance, so if you already own the home, you can fold a renovation into a new conventional first mortgage rather than stacking a second loan on top. Either way it stays a conventional loan, with the conventional loan's usual rules; the conventional requirements guide covers the baseline qualifying picture.
And yes, I originate these. HomeStyle is a real product on my shelf at Satori Mortgage, not a referral out the door. Fewer loan officers work on renovation files because the moving parts (bids, draws, inspections) take more coordination than a standard purchase. That's exactly why it's worth doing well.
How does a HomeStyle Renovation loan work?
One loan carries both the home and the work: the appraisal is based on the as-completed value, the renovation money is escrowed at closing, and a licensed contractor is paid through inspected draws as the work is completed.
The sequence, start to finish: you find the home (or decide to renovate the one you own) and get a detailed bid from a licensed contractor. The appraiser values the home as-completed, using the plans and that bid. The loan closes once, covering the purchase or refinance plus the renovation budget. The renovation funds don't land in your checking account; they sit in an escrow account, and the contractor is paid in draws as each stage of work is finished and inspected. When the work is done, you're left with exactly one conventional mortgage and one payment, no construction loan to replace and no second closing. If your project is a teardown rather than a renovation, that's a different product: the conventional one-time close construction loan is HomeStyle's ground-up sibling, and I walk through which one fits on that page.
What repairs can a HomeStyle loan cover?
A broad range, and that breadth is HomeStyle's signature. Per the Fannie Mae Selling Guide, the allowed scope runs from structural repairs to finishes, and it's wider than FHA 203(k) allows, reaching some luxury improvements such as pools.
In practice that covers the projects fixer-upper buyers actually face: foundation and structural work, roofs and systems, kitchen and bath remodels, additions, and the outdoor projects FHA's program won't touch. But two honest boundaries come with that. First, the Selling Guide's test is that any improvement must be permanently affixed to the property and add value, so freestanding purchases (furniture, equipment) don't qualify, and no repair is automatically approved just because it's on your wish list; your specific project is reviewed in underwriting. Second, the work is done by licensed contractors and paid through inspected draws. This is not a do-it-yourself program, so don't plan your budget around your own labor. One more name worth knowing: Freddie Mac offers CHOICERenovation, its equivalent renovation mortgage, so the conventional world has two flavors of the same idea. The product details on this page follow Fannie Mae's HomeStyle, per the Selling Guide.
What are the HomeStyle LTV and renovation limits?
HomeStyle's maximum loan-to-value ratio and its cap on renovation costs are set by the Fannie Mae Selling Guide, and they vary by transaction, so I don't publish a single number here.
That's deliberate, not coy. The limits depend on how the deal is shaped: occupancy, property type, and whether it's a purchase or a refinance all move the lines, and Fannie Mae updates the Guide on its own schedule. A percentage I paste here today could be quietly wrong by the time you read it, and a renovation budget built on a stale number is how projects end up short of funds. The current rules live in the Fannie Mae Selling Guide's HomeStyle Renovation section, and when we scope your project I'll run your actual numbers against the current Guide, including how the renovation budget relates to the as-completed value, before you commit to anything.
HomeStyle vs FHA 203(k) vs VA renovation: which one?
HomeStyle is the conventional answer, and three things define its lane: the allowed scope is broader than FHA 203(k), it's the only one of the three that can finance second-home and investment occupancies, and its mortgage insurance is conventional PMI, which cancels under the Homeowners Protection Act at 80% LTV by request, rather than FHA's life-of-loan MIP on low-down loans.
The other two programs have their own strengths, and I've written each in full on its own page rather than recapping them here: the FHA 203(k) renovation guide covers FHA's version, which often suits lower credit tiers, and the VA renovation loan guide covers the option for eligible veterans. Which one wins is a file-by-file answer that depends on your credit, your occupancy, and the project itself, and that's a conversation, not a chart.