Both let a borrower roll renovation costs into a purchase or refinance mortgage, but Fannie Mae HomeStyle Renovation is a conventional loan that also allows one-unit second homes and investment properties, while FHA 203(k) is an FHA-insured loan with Standard and Limited versions and, under FHA's general occupancy rules, is not available for investment properties except to HUD-approved nonprofits and government agencies. HomeStyle has no minimum renovation amount, caps renovation costs at 75% of the lesser of purchase price plus renovation costs or the as-completed value on a purchase, and requires completion within 15 months. FHA's Standard 203(k) has a $5,000 minimum repair cost and requires a 203(k) Consultant, while the Limited 203(k) covers minor, nonstructural repairs up to $75,000.
Fannie Mae HomeStyle Renovation
- Lets a borrower purchase or refinance and include funds for repairs, remodeling, renovations or energy improvements; there are no required improvements and no minimum dollar amount, but it may not be used for a complete tear-down and rebuild. Fannie Mae B5-3.2-01
- Eligible properties: one- to four-unit principal residences, one-unit second homes, one-unit investment properties, manufactured homes, and units in eligible PUD, condo or co-op projects. Fannie Mae B5-3.2-02
- On a purchase, renovation costs may not exceed 75% of the lesser of the purchase price plus renovation costs or the "as completed" appraised value; on a refinance, 75% of the "as completed" value; for manufactured homes, 50%. Fannie Mae B5-3.2-02
- Work must be completed within 15 months of closing; when a project runs longer, the possible remedies include a limited extension of up to 18 months from closing. Fannie Mae B5-3.2-01
- Work must be done by a licensed contractor where licensing applies; a "Do It Yourself" option on one-unit properties is limited to 10% of the "as completed" value. Fannie Mae B5-3.2-03 Fannie Mae B5-3.2-02
- Renovation costs may include a contingency reserve (not required for one-unit properties; 10% required for two- to four-unit properties) and up to six months of PITIA if a principal residence cannot be occupied during renovation. Fannie Mae B5-3.2-04 Fannie Mae B5-3.2-02
FHA 203(k)
- Used to rehabilitate an existing one- to four-unit structure (alone, with a purchase or with a refinance) or the interior of an eligible condominium unit; the property must have been completed for at least one year before case number assignment. FHA 4000.1 II.A.8.a
- Standard 203(k): remodeling and repairs, minimum repair cost of $5,000, 203(k) Consultant required. Limited 203(k): only minor remodeling and nonstructural repairs, total rehabilitation costs up to $75,000, Consultant optional. FHA 4000.1 II.A.8.a
- Under FHA's general occupancy rules, investment properties are not eligible except for HUD-approved nonprofits and state or local government agencies, and secondary residences are permitted only with FHA's written approval. FHA 4000.1 II.A.1.b.iii
- Purchase maximum mortgage: the applicable LTV times the lesser of the adjusted as-is value plus financeable costs or 110 percent of the After Improved Value (100 percent for condominiums), within the Nationwide Mortgage Limits. FHA 4000.1 II.A.8.a
- Contingency reserve: for a Standard 203(k), 10% to 20% of repair costs is required for structures 30 years or older (15% minimum if utilities are inoperable) or with termite damage, otherwise optional up to 20%; for a Limited 203(k), optional up to 20 percent. FHA 4000.1 II.A.8.a
- A Standard 203(k) may finance a Mortgage Payment Reserve of up to 12 months of payments while the property cannot be occupied. FHA 4000.1 II.A.8.a
Quick comparison
| Feature | Fannie Mae HomeStyle Renovation | FHA 203(k) | Source |
|---|---|---|---|
| Minimum renovation amount | None | Standard: $5,000 repair minimum | Fannie Mae B5-3.2-01; FHA 4000.1 II.A.8.a |
| Renovation cost limit | Purchase: 75% of lesser of price plus renovation costs or as-completed value | Limited: $75,000 total rehabilitation costs | Fannie Mae B5-3.2-02; FHA 4000.1 II.A.8.a |
| Who does or oversees the work | Licensed contractor; DIY up to 10% of as-completed value (one-unit) | 203(k) Consultant required for Standard; optional for Limited | Fannie Mae B5-3.2-02, B5-3.2-03; FHA 4000.1 II.A.8.a |
| Property and occupancy | 1-4 unit principal residence; one-unit second home or investment property | Existing 1-4 unit structure completed at least one year; investment properties ineligible (nonprofit and government exceptions); second homes only with FHA approval | Fannie Mae B5-3.2-02; FHA 4000.1 II.A.8.a, II.A.1.b.iii |
| Contingency reserve | Not required for one unit; 10% for two to four units | Standard: 10% to 20%, required for structures 30+ years old or with termite damage; Limited: optional, up to 20% | Fannie Mae B5-3.2-04; FHA 4000.1 II.A.8.a |
| Payments while vacant | Up to six months PITIA (principal residence) | Up to 12 months (Standard) | Fannie Mae B5-3.2-02; FHA 4000.1 II.A.8.a |
Sources
- Fannie Mae Selling Guide, September 2, 2026 version: B5-3.2-01, HomeStyle Renovation Mortgages (p. 735, 736); B5-3.2-02, HomeStyle Renovation Mortgages: Loan and Borrower Eligibility (p. 739, 740); B5-3.2-03, HomeStyle Renovation Mortgages: Collateral Considerations (p. 742); B5-3.2-04, HomeStyle Renovation Mortgages: Costs and Escrow Accounts (p. 744)
- FHA Single Family Housing Policy Handbook 4000.1, August 12, 2026 version: II.A.8.a.i, 203(k) Rehabilitation Mortgage Insurance Program: Overview (p. 390); II.A.8.a.iii, Property Eligibility (p. 391); II.A.8.a.i(A)(1), Standard 203(k) (p. 390); II.A.8.a.i(A)(2), Limited 203(k) (p. 390); II.A.1.b.iii(C), Investment Property (PDF p. 187, p. 161); II.A.1.b.iii(B), Secondary Residence (p. 161); II.A.8.a.ix, Maximum Mortgage Amount for Purchase (p. 406); II.A.8.a.vi(E), Standard 203(k) Financeable Contingency Reserves (p. 397); II.A.8.a.vii(E), Limited 203(k) Financeable Contingency Reserves (p. 402); II.A.8.a.vi(F), Standard 203(k) Financeable Mortgage Payment Reserves (p. 398)
Agency guides set the baseline; individual lenders can add stricter overlays. Sources are the guideline versions in Zeitro Strata as of October 29, 2026.
