In short
A Fannie Mae HomeStyle refinance replaces your current mortgage with a conventional loan that includes the cost of a remodel, based on the home's as-completed value. It has no minimum credit score with DU approval (620 manual) and works for primary homes, second homes and one-unit investment properties.
Reviewed by Scottie Campbell, NMLS #1610726 · Last updated October 18, 2026
How does a Fannie Mae HomeStyle refinance work?
A HomeStyle refinance pays off your existing mortgage and adds the cost of your renovation into one new conventional loan, based on the home's as-completed value. A licensed contractor provides a written bid, an appraiser values the home as it will be after the work, and the renovation funds go into escrow and are paid out in stages as the work is done. There's no minimum credit score with a Fannie Mae DU approval, and 620 if manually underwritten. It works on primary residences, second homes and one-unit investment properties.
Key takeaways
You like where you live. You just don't love the house the way it is. Maybe the kitchen is cramped, the family outgrew the layout, or you've wanted a pool for years. Moving means selling, buying and paying two sets of costs. A Fannie Mae HomeStyle refinance lets you stay put and remodel, by replacing your current mortgage with a new conventional loan that includes the renovation budget.
Remodel the Home You Already Have
The math on moving can be rough. Selling costs, buying costs, moving costs, and you still might not find a house in the neighborhood you love. For a lot of homeowners, remodeling makes more sense.
The question is how to pay for it. A HomeStyle refinance rolls the remodel into your mortgage, and the loan is sized on what the home will be worth after the work, not what it's worth today. What that means for you is a bigger project may be within reach than your current equity alone would allow.
What You Can Do With It
HomeStyle is flexible about the kind of work:
- Kitchens and bathrooms. Full remodels, not just cosmetic touch-ups.
- Additions and layout changes. A new bedroom, an expanded living area or an opened-up floor plan.
- Systems. Roof, HVAC, electrical, plumbing and windows.
- Upgrades. Pools, outdoor kitchens, decks and landscaping, as long as they're permanently attached.
- Energy improvements. Insulation, efficient windows and similar work.
It's also not limited to your primary home. Second homes and one-unit investment properties are eligible, which is a big deal if you're an investor improving a rental.
How It Compares to Other Options
| Option | Loan type | Based on | Best for |
|---|---|---|---|
| HomeStyle Refinance | Conventional | As-completed value | Larger remodels, upgrades, rentals |
| FHA 203(k) Refinance | FHA | After-repair value | Credit from 500, primary home only |
| Home equity loan or HELOC | Second lien | Current value | Strong equity, keep your first mortgage |
| Cash-out refinance | Varies | Current value | Equity today, cash for any purpose |
Quite frankly, if you already have plenty of equity and you'd like to keep your current first mortgage, a HELOC might be the simpler route. HomeStyle shines when the remodel is what creates the value, or when you'd like everything in one loan.
What to Know Before You Start
A HomeStyle refinance replaces your current mortgage. That's the part to think hardest about:
- Your current loan goes away. If you have a first mortgage you'd rather keep, compare this against a HELOC first.
- It's for the renovation, not spending cash. The money goes into escrow and pays your contractor as work gets done.
- Mortgage insurance. If your loan is above 80% of the as-completed value, PMI applies. It can be removed later once you reach enough equity.
- Closing costs. Like any refinance, there are closing costs, plus a few renovation items like inspections.
This is exactly why I run a Total Cost Analysis. We look at the total cost over the time you plan to own the home and compare HomeStyle, a HELOC and doing the project in phases. Sometimes the answer surprises people.
On rates: Your rate depends on your scenario and the day's market. Reach out and I'll price it for real.
The Steps
- Start with the project. Tell me what you'd like to do and roughly what it costs.
- Contractor bid. Your licensed contractor provides a detailed bid and any plans the project needs.
- Appraisal. The appraiser values the home based on the finished remodel.
- Closing. Your old mortgage is paid off and the renovation funds go into escrow.
- Draws. The contractor is paid in stages as inspections confirm the work.
My team keeps the contractor, appraiser and title company moving together. High-tech, high-touch.
Why Work With Waymaker Mortgage Company
Waymaker funds conventional loans in house, with underwriting through multiple investor partners. A bank has one underwriting desk and one set of rules. If one investor's guidelines don't fit your project or your property, I take it to one that does.
I've been doing this since 2003, and I renovate my own investment properties, so I can help you think through which improvements tend to add value in Georgetown, TX and which ones are more about how you want to live. You're talking to the owner of this company.
Let's Map Out Your Remodel
It's never a no. It's always a how. Send me your project idea and a rough budget, and we'll put together a Mortgage Action Plan. My job is to educate and empower you. Your job is to decide. Feel free to text me.
Information on this page is general and educational. It is not a commitment to lend or an offer of credit. Programs, guidelines and eligibility change and depend on your full scenario. Waymaker Mortgage Company, NMLS 2440476. Equal Housing Lender.
Quick facts
- Loan type
- Conventional (Fannie Mae HomeStyle) refinance with renovation
- Minimum credit score
- No minimum with Fannie Mae DU approval; 620 manual
- Loan based on
- As-completed value of the home
- Occupancy
- Primary residence, second home or one-unit investment
- Luxury items
- Allowed, such as pools and outdoor kitchens
- Renovation funds
- Held in escrow and paid to the contractor in draws
Is this loan right for you?
Who it's for
- Homeowners who want to remodel instead of moving
- Owners whose project will add value beyond their current equity
- Investors improving a one-unit rental or owners improving a second home
- Homeowners who want upgrades like a pool or outdoor kitchen included
Who it may not fit
- Homeowners with a first mortgage they'd rather keep, where a HELOC may fit better
- Anyone looking for cash to use outside the renovation
Pros and cons
Pros
- Remodel and refinance in one conventional loan
- Loan based on the as-completed value of the home
- Works for primary, second home and investment properties
- Upgrades and luxury improvements allowed
- PMI can be removed once you reach enough equity
Trade-offs to weigh
- Replaces your current first mortgage
- Closing costs plus renovation steps like bids, inspections and draws
- Funds go to the contractor, not to you as cash
Frequently asked questions
What credit score do I need for a HomeStyle refinance?
There's no minimum credit score with a Fannie Mae DU approval, and 620 if the loan is manually underwritten. A minimum may still apply when mortgage insurance is required. I'll review your full scenario.
Can I use a HomeStyle refinance on a rental property?
Yes. HomeStyle refinances are available for one-unit investment properties and second homes, as well as primary residences. That makes it a useful tool for investors improving a rental.
Do I get cash back from a HomeStyle refinance?
No. The renovation funds are held in escrow and paid to your contractor as work is completed. If you need cash for other purposes, a cash-out refinance or a HELOC is a better fit.
Is a HomeStyle refinance better than a HELOC?
It depends on your equity and your current mortgage. A HELOC is based on today's value and lets you keep your first mortgage. HomeStyle is based on the finished value and puts everything in one loan. I'll run both in a Total Cost Analysis so you can decide.
Can I do some of the work myself?
Generally, the work needs to be done by a licensed contractor with a written bid. If you're handy, we can talk about which parts of the project you might do separately, outside the loan.
What's the difference between HomeStyle and an FHA 203(k) refinance?
HomeStyle is conventional, works for second homes and rentals, allows luxury items and has removable PMI. The FHA 203(k) refinance accepts credit from 500 but is for primary residences only and carries FHA mortgage insurance.
Related loan programs
Low down payment options, dozens of down payment assistance programs and a Greenlight Approval that helps your offer compete. It's never a no. It's always a how.
Flexible credit, low down payment, and dozens of assistance programs. I'll show you how FHA fits your plan, then you decide.
No monthly mortgage insurance, no minimum credit score on my end, and VA loans funded in house by Waymaker Mortgage Company with underwriting through multiple investors.
Last updated October 18, 2026 · Reviewed by Scottie Campbell, NMLS #1610726. This page is educational and not a commitment to lend; program details change — ask for current figures.