Do more with your renovation loan for less money down
Bring your vision to life with a Conventional Renovation Loan that lets qualified home buyers purchase or refinance and renovate with one loan. With down payments as low as 3% and financing for a wider range of eligible improvements, you have more flexibility to create the home you want.
What is a Conventional Renovation Loan?
Conventional Renovation Loans combine your home purchase or refinance and eligible renovation costs into one mortgage. Backed by Fannie Mae's HomeStyle® Renovation and Freddie Mac's CHOICERenovation® programs, these loans provide a flexible way for qualified borrowers to finance everything from cosmetic updates to major repairs with a single monthly payment. Unlike many renovation financing options, Conventional Renovation Loans can offer down payments as low as 3% for qualified home buyers and financing for a wider variety of eligible improvements.
Highlights
Conventional Renovation Loan features
HomeStyle® and CHOICERenovation® have several similar features
Conventional Renovation Loans options
CHOICERenovation® and HomeStyle® Renovation Loans share many of the same benefits, including low down payment options and financing for home improvements. Here's what sets each program apart.
CHOICERenovation®
What makes it different:
- Includes eligible disaster preparedness and resiliency improvements
- Can finance projects that help protect against hurricanes, floods, wildfires, earthquakes, and other natural hazards (subject to program guidelines)
HomeStyle® Renovation
What makes it different:
- Allows eligible luxury improvements, including swimming pools, outdoor kitchens, and other value-adding amenities (subject to program guidelines)
- Great for borrowers who want more renovation flexibility
What can I renovate?
- Kitchen remodels
- Bathroom renovations
- New flooring
- Interior and exterior painting
- Window and door replacement
- Roofing
- Plumbing
- Electrical systems
- HVAC replacement
- Foundation and structural repairs
- Expansions
- Room additions
- Finished basements
- Accessory Dwelling Units (ADUs)
- Garages
- Pools
- Energy-efficient upgrades
- Smart home improvements
- Backup generators
- Storm resiliency improvements
- Landscaping and exterior projects
Conventional Renovation Loans vs FHA 203(k) Loans
Compare Conventional Renovation Loans and FHA 203(k) Loans side by side. Learn the differences in down payment requirements, credit score guidelines, eligible renovations, mortgage insurance, and financing options before you apply.
|
|
FHA Renovation |
Conventional Renovation |
|
Down payment |
3.5% |
3% |
|
Min credit score |
620 |
600 |
|
Property types |
Primary residence only |
Primary residence, second home, investment property |
|
Renovation types allowed |
Nonstructural repairs and updates, no pools, limited structural repairs, no luxury improvements |
Additions, pools, ADUs, structural changes allowed, luxury improvements allowed |
|
Mortgage insurance |
Required |
May be cancelled |
Frequently Asked Questions
We’re here to help! Find answers to your everyday banking questions.
Both are conventional renovation loan programs that allow you to finance home improvements with your mortgage. HomeStyle® Renovation, backed by Fannie Mae, allows eligible luxury improvements like swimming pools and outdoor kitchens. CHOICERenovation®, backed by Freddie Mac, includes financing for eligible disaster preparedness and resiliency improvements, such as projects designed to better protect a home from certain natural hazards. Your loan officer can help determine which option best fits your renovation plans.
Eligible improvements may include:
- Kitchen and bathroom remodels
- Room additions
- Structural repairs
- Roof replacement
- HVAC, plumbing, and electrical upgrades
- Flooring and painting
- Energy-efficient improvements
- Accessibility modifications
- Accessory Dwelling Units (ADUs), where eligible
- Disaster resiliency improvements (CHOICERenovation®)
- Swimming pools and other eligible luxury amenities (HomeStyle®)
Yes. A conventional renovation loan allows eligible borrowers to purchase a home that needs repairs or updates and finance those renovation costs in the same loan, eliminating the need for separate financing.
Yes. Both HomeStyle® and CHOICERenovation® Loans can be used to refinance an existing mortgage and finance eligible home improvements with one loan.
Qualified borrowers may be able to purchase a home with as little as 3% down, depending on occupancy, loan type, and eligibility requirements. Your required down payment will vary based on your specific loan scenario.
Many conventional renovation loans require a minimum credit score of 600, although a higher score may improve your financing options. Additional qualification requirements, including income, assets, and debt-to-income ratio, also apply.
If your down payment is less than 20%, private mortgage insurance (PMI) is generally required. Unlike FHA mortgage insurance, PMI on conventional loans may be removed once you meet eligibility requirements, such as reaching sufficient home equity.
In many cases, yes. Unlike FHA 203(k) Loans, which are limited to primary residences, conventional renovation loans may be available for eligible second homes and investment properties, subject to program guidelines.
The best renovation loan depends on your financial situation and renovation goals. Conventional renovation loans may offer:
- Lower down payment options for qualified borrowers
- Broader property eligibility, including second homes and investment properties
- More renovation flexibility
- Cancelable private mortgage insurance
- Specialty options like luxury improvements or disaster resiliency projects
FHA 203(k) Loans may be a better fit for borrowers who qualify for FHA financing and prefer its underwriting guidelines. A CMG Home Loans loan officer can help you compare your options.