November 5th, 2026 5:42 PM by Salim Kader MLS#130505
Found a home in the right location that needs work? Fannie Mae’s HomeStyle® Renovation and HomeStyle® Refresh mortgages may let eligible borrowers combine home financing and approved improvements into one mortgage.
For buyers in Seattle and across Washington State, these options may expand the search beyond move-in-ready properties. Existing homeowners may also finance eligible improvements through a qualifying refinance.
The appropriate choice depends on your project’s scope, budget, completion schedule, property, borrower qualifications, and participating lender’s requirements.
HomeStyle Renovation accommodates a broad range of projects, including larger renovations, eligible additions, and structural work.
HomeStyle Refresh, formerly HomeStyle Energy, supports smaller-scale projects within a lower improvement-financing limit and shorter completion period. It is not limited to cosmetic repairs or energy upgrades.
Neither program is a grant. Financed improvements become part of your mortgage debt and must be repaid. These are conventional mortgage options offered through participating lenders, not direct loans from Fannie Mae.
The following are potentially eligible project examples, not automatic approvals. Work must satisfy the selected program, lender requirements, applicable codes, permits, and property restrictions. Refresh projects must also fit its smaller financing allowance and shorter completion schedule.
Larger projects generally deserve a HomeStyle Renovation review first. Portable furnishings and unrelated personal purchases are not renovation financing. Certain installed appliances may be permitted under applicable rules.
For an eligible purchase, renovation costs generally cannot exceed 75% of the lesser of the purchase price plus renovation costs or the as-completed appraised value. For an eligible refinance, the general limit is 75% of the as-completed appraised value.
Manufactured homes and certain work arrangements have different restrictions. Renovation work generally must be completed within 15 months after closing, and a lender may require a shorter schedule.
For eligible improvements, financing generally cannot exceed 15% of the as-completed appraised value. Improvements must generally be completed within 180 days of the mortgage note date.
These percentages are improvement-financing limits, not down-payment requirements or promises of available borrowing. Total mortgage limits, borrower qualifications, property restrictions, and lender requirements also apply. Certain energy-related debt-payoff transactions follow additional rules.
Potentially, yes. An eligible purchase can combine the home acquisition and approved improvements rather than requiring you to fund all the work separately after closing.
You may still need funds for the down payment, closing costs, reserves, contingencies, and expenses outside the approved financing. Not every property is eligible, and borrower pre-approval does not establish project approval.
Have the property and intended work reviewed before relying on renovation financing in your offer. Discuss financing and inspection contingencies with your real estate professional.
An as-completed appraisal estimates the property’s value assuming the approved improvements are finished according to the plans and specifications. The appraiser evaluates the proposed work, property, and relevant market information.
Renovation spending does not guarantee an equal increase in value. The project must fit both the financing requirements and the lender’s accepted appraisal.
Consider a hypothetical buyer comparing a home needing updates with a more expensive finished property. The renovation scenario assumes a $250,000 purchase, $35,000 improvement budget, and $300,000 completed value.
The renovation scenario has a $15,000 lower purchase-and-improvement cost than the move-in-ready alternative, before financing costs, closing expenses, and other project charges. This is a cost comparison, not a guaranteed savings result.
The $35,000 improvement budget is approximately 11.7% of the assumed $300,000 completed value. It could fit Refresh’s general improvement allowance if all applicable financed project costs remain within the limit and all other requirements are satisfied.
Estimated completed value minus outstanding loans secured by the property equals estimated equity. In this example, the assumed value exceeds the purchase-and-improvement cost by $15,000, but that difference is not the borrower’s total equity or net profit.
Actual equity depends on the supported property value and outstanding loan balances. It may include the buyer’s own contribution and is not automatically available to withdraw.
Hypothetical educational example, not an available property, appraisal, credit offer, or representation of typical Seattle prices. No interest rate, APR, loan amount, down payment, or monthly payment is quoted. Financing costs, closing expenses, reserves, overruns, and other project charges are not included. Values and financial results are not guaranteed.
An eligible HomeStyle transaction may finance adding or renovating an accessory dwelling unit. Review local zoning, permits, utilities, site conditions, property eligibility, contractor plans, appraisal treatment, and completion deadlines.
Refresh may accommodate an eligible ADU within its limits. More extensive construction may require Renovation or another financing option. Projected ADU rent is not automatically qualifying income; separate underwriting requirements apply.
HomeStyle Renovation does not permit complete teardown and reconstruction of the home.
Mortgage payments remain due under the loan agreement while work is underway. Do not assume the entire renovation budget will be paid directly to you at closing.
Certain HomeStyle Renovation transactions may permit eligible payment reserves when a principal residence cannot be occupied during work. Availability depends on program and lender requirements. Unspent funds are handled under the applicable rules and agreement, not automatically returned as unrestricted cash.
A HomeStyle refinance replaces your current mortgage. If your existing rate is favorable, compare the complete cost with a HELOC, home equity loan, or another appropriate option that may preserve the first mortgage.
Review interest costs, remaining and new repayment periods, closing expenses, project fees, monthly obligations, and cash reserves. A lower monthly payment can still mean higher total borrowing costs, particularly when repayment is extended.
No. It can support broader eligible improvements, including certain ADUs, outdoor structures, remediation, and resiliency work. The project must fit applicable limits and requirements.
Do-it-yourself work is restricted and may not be offered by the lender. Obtain approval before relying on your own labor, purchasing materials, or starting work.
Not necessarily. Certain financing features may carry additional first-time-buyer or HomeReady® requirements, but HomeStyle eligibility is not limited to first-time buyers.
Certain properties may qualify, subject to product and lender rules. Condominiums may require project eligibility review and association approval for proposed work. Do not assume financing can cover work on association-owned common elements or pay an existing special assessment.
Do not assume they can. A HomeStyle transaction is structured and underwritten to include approved improvements. Discuss your plans before closing; later financing generally requires a separate eligible transaction.
Contact the lender or renovation administrator promptly. Changes may require approval, additional borrower funds, revised documents, or further appraisal review. Extensions are not automatic.
No. Completed value depends on the appraisal and market conditions. Project costs, transaction expenses, and outstanding secured debt also affect your financial result.
A home does not need every desired feature on the day you buy it. HomeStyle Renovation and HomeStyle Refresh may help eligible borrowers finance approved improvements through one mortgage.
Start with a realistic project plan and financing review before committing to a purchase or construction contract. You can also review our mortgage pre-approval checklist and Washington mortgage options.
At Pacific Coast Financial LLC, we can review your proposed project and help determine whether a participating lender offers a suitable option. Contact Sam Kader, NMLS #130505, at 206-393-0684 to discuss your goals.
Request a Renovation Financing Consultation
For educational purposes only; not individualized legal, tax, or construction advice. This is not a commitment to lend or a guarantee of approval, project eligibility, savings, or increased property value. Financing is subject to borrower qualifications, property and project eligibility, appraisal, underwriting, participating lender requirements, and program availability. Lenders may impose requirements beyond Fannie Mae’s guidelines. Costs, terms, and completion requirements vary and may change. Rates are subject to change until locked. HomeStyle® and HomeReady® are registered trademarks of Fannie Mae. Pacific Coast Financial LLC is not affiliated with or endorsed by Fannie Mae.