Selling Guide

Published April 07, 2021

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How is the maximum renovation cost calculated for a HomeStyle Renovation loan?

Mortgage Terms

A HomeStyle Renovation mortgage may be either a fixed-rate mortgage or an ARM loan. The original principal amount of the mortgage may not exceed Fannie Mae’s maximum allowable mortgage amount for a conventional first mortgage.

Fannie Mae provides the HomeStyle Renovation Maximum Mortgage Worksheet (Form 1035)*, to assist lenders in calculating the maximum loan amount.

The maximum cost for renovations for various HomeStyle Renovation scenarios are described in the following table.

Transaction Type The cost of renovations must not exceed...
Purchase transaction 75% of the lesser of
  • the sum of the purchase price of the property plus renovation costs, or
  • the “as completed” appraised value of the property.
Refinance transaction 75% of the “as completed” appraised value of the property.
Manufactured homes the lesser of
  • $50,000 or
  • 50% of the “as completed” appraised value.

For additional information, see B5-3.2-02, HomeStyle Renovation Mortgages: Loan and Borrower Eligibility.

*For a complete list of forms used in fulfilling requirements contained in the Selling and Servicing Guides, see the Guide Forms page.

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If you have additional questions, Fannie Mae customers can visit Ask Poli to get information from other Fannie Mae published sources.

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