HomeStyle Renovation Loan in Florida: The Conventional Answer to the 203k
A HomeStyle renovation loan Florida buyers use finances the purchase and the renovation in one conventional loan, with fewer restrictions than the FHA 203k. Pools, luxury items and investment properties are allowed. PMI cancels.
Educational content only. This article is for informational purposes and does not constitute financial, legal, or lending advice. Loan programs, rates, and eligibility requirements change frequently. Consult a licensed mortgage professional before making any borrowing decision. Mortgage Capital | NMLS# 1859012 | Licensed in Florida.
A HomeStyle renovation loan Florida buyers and owners use finances the purchase or refinance and the renovation in one conventional loan, with fewer limits than the FHA 203k.
Pools, luxury finishes, second homes and rentals are allowed, and PMI cancels with equity. Our renovation loan page covers the family.
What it is
Fannie Mae's renovation product; Freddie Mac's CHOICERenovation is the near-identical sibling.
The Fannie Mae HomeStyle page sets the rules.
One loan based on the completed value.
Renovation funds held in escrow and drawn as work completes.
Conventional underwriting and pricing.
What can be financed
Any permanent improvement: structural, kitchens, baths, roofs, pools, additions, ADUs.
See our guide to pool financing in Florida.
Energy and hurricane hardening.
See our guide to hurricane retrofit financing in Florida.
Not tear-down and rebuild in most cases.
Compared to the FHA 203k
203k: 3.5 percent down, lifetime mortgage insurance, no pools or luxury items, primary residence only.
See our guide to the FHA 203k in Florida.
HomeStyle: 3 to 5 percent down for primary, cancellable PMI, pools allowed, second homes and rentals allowed.
203k is easier on credit; HomeStyle is better on cost for strong files.
See our guide to FHA versus conventional in Florida.
Down payment and loan-to-value
Based on the lesser of purchase price plus renovation cost or the completed appraised value.
See our guide to loan-to-value in Florida.
Up to 97 percent for first-time buyers on a primary residence.
Lower for second homes and rentals.
Renovation cost capped at a percentage of completed value.
The appraisal
An as-completed appraisal based on plans and the contractor's bid.
See our guide to low appraisals in Florida.
Value added must support the loan.
Over-improving for the neighbourhood produces a gap.
Comparable renovated sales help.
The contractor
Licensed and approved by the lender; a bid with a line-item scope.
The Florida DBPR licence lookup verifies.
Owner-builder is allowed in narrow cases.
Draws on inspection.
See our guide to construction loan draw schedules in Florida.
The escrow and timeline
Renovation funds held by the lender; a contingency reserve of 10 to 15 percent.
Work completes within twelve months, extendable.
Florida permitting can consume months; plan the timeline.
See our guide to open permits at closing in Florida.
Unused funds pay down principal.
Living during the work
Up to six months of mortgage payments can be financed if the home is uninhabitable during renovation.
A rare and useful feature.
Rent elsewhere while the work completes.
The lender confirms habitability.
Budget the overlap.
Investment properties
One-unit rentals qualify with a larger down payment.
See our guide to fix and flip loans in Florida for the short-term alternative.
A long-term renovation-and-hold on conventional terms.
Investor pricing applies.
Cheaper than hard money for a hold.
Second homes
Allowed, unlike the 203k.
See our guide to snowbird second home mortgages in Florida.
A seasonal owner renovating a Florida home before moving in full-time.
Second-home pricing.
The same escrow process.
Condos
Interior renovations in a warrantable building.
See our guide to condo questionnaires in Florida.
Association approval of the work.
Non-warrantable buildings are out.
Structural work belongs to the association.
Refinance version
An owner refinances into a HomeStyle to fund a renovation.
See our guide to cash-out versus HELOC in Florida.
Compare to a HELOC when the first mortgage rate is low.
HomeStyle re-prices the whole balance.
The as-completed value can support more than a HELOC.
PMI
Below 20 percent of completed value, PMI applies and cancels at 80 percent.
See our guide to removing PMI in Florida.
The renovation often adds enough value to reach it sooner.
A 203k's insurance never cancels.
A real long-term difference.
Florida-specific projects
Roof replacement, impact openings, repipes, panel replacement, seawalls on waterfront.
See our guide to roof replacement financing in Florida.
Insurance binds on the plan; credits apply at completion.
See our guide to Florida homeowners insurance cost.
Flood-zone work must respect the 50 percent rule.
Costs
Standard closing costs plus a renovation fee, inspection fees and Florida doc stamps on the whole loan.
See our guide to Florida doc stamps and intangible tax.
The contingency reserve is financed.
Rates run slightly above a standard conventional loan.
Compare to a purchase plus a HELOC.
A worked example
A 1970s house bought with a HomeStyle loan funding a new roof, impact windows, a repipe and a kitchen.
The as-completed appraisal supports the total.
Five percent down on a primary residence; PMI cancels within a few years as value rises.
The insurer binds on the plan and applies credits after the roof and windows.
The work finishes in nine months.
Change orders
Scope changes after closing need lender approval.
Upgrades beyond the budget come from cash.
The contingency covers overruns on the approved scope, not new work.
Decide the scope carefully before closing.
Florida material prices move; a fixed-price bid helps.
Where to start
Get a contractor's line-item bid and a lender's as-completed value estimate.
Compare HomeStyle to a 203k on cost and to a purchase-plus-HELOC on structure.
Then start a conversation and we will run the as-completed numbers.