Delaware HomeStyle Renovation Loan

What is the Delaware HomeStyle Renovation Loan?

When searching for your perfect Delaware home, it’s rare and fortunate to find one that fits your exact needs. Unless you are building your home from the ground up, you end up taking the personality and design choices of the previous owners. If you have specific desires for your new home, like detached garages, pools, and other luxury renovations, the Fannie Mae Delaware HomeStyle Renovation Loan is your best option. It covers luxury renovations that are not covered by other renovation loans with some things to consider. The John Thomas Mortgage Team can help you navigate your options for renovations loans – learn more by calling 302.703.0727 or apply online for a rate quote.

Who Should Get a FNMA HomeStyle Renovation Loan?

While other renovation loan programs (like the FHA 203k Renovation Loan) are great for owner-occupied renovations, there are some restrictions. The Homestyle Renovation Loan allows homeowners to:

  • Finance luxury renovations that are not permitted under FHA guidelines
  • Gain funding to cover housing costs during upgrades and construction

The HomeStyle Renovation Loan includes the cost of necessary upgrades and improvements built into the loan package. Unlike other loan products, Delaware HomeStyle Renovation Loans are based on the “as completed” value – the loan takes into consideration all the upgrades that will be made. Even so, funds for the improvements won’t be released for homeowners/contractors until the work is certified complete by an inspection.

The Homestyle renovation lender will require the property to be appraised by a licensed appraiser.  The appraiser will perform two appraisals in one report; an as is value and an after repaired value based on the renovations provided by the contractor.

The Difference Between Fannie Mae HomeStyle Renovation Loan and FHA 203k Loans

Delaware HomeStyle Renovation Loan - Ladder

While the two renovation loan programs both finance improvements to your potential home, there are some key differences:

  • Downpayment- The Fannie Mae HomeStyle loan’s minimum down payment is 5 percent, while FHA 203k’s may only require 3.5 percent of the purchase price.
  • Credit Qualifications – HomeStyle Renovation lenders usually require a higher qualifying credit score. Borrowers who are dealing with bruised or subpar credit will have a tougher time being approved.
  • Closing Costs – FHA 203k loans typically charge higher on closing costs than Homestyle Renovation Loans.
  • FHA 203k can only be used for a Primary Residence but a HomeStyle Reno Loan can be used for Primary, Secondary and Investment properties.


There are key differences in usage for the various Renovation Loans in Delaware. The FHA 203k Renovation Loan can be used to complete renovations or upgrades on an existing home with some restrictions on the amount of repairs and types of repairs based on whether you are doing a limited 203k loan or a Full 203k Loan.  Both the Delaware HomeStyle Renovation loan and the FHA 203k Rehab Loan require that the borrower use only licensed professionals who have been approved to perform the renovations by the lender.

One of the biggest differences between the two renovation loans is the restriction on luxury upgrades. Unlike the FHA 203k loan, the Delaware Homestyle Renovation Loan can also be used on luxury renovations like pools, garages, gazebos, and more.

What are the Requirements I Must Meet to Get a Homestyle Renovation Loan?

Other than the requirements listed above, there are some property requirements that the home will need to meet. In order to be considered eligible for, the home must be one of the following:

  • A principal residence (no more than four units)
  • For second homes, the home must be one-unit
  • Single-unit investment properties (co-ops, condos)
  • Must not be a manufactured home (mobile)

It’s important to note that the Delaware Homestyle Renovation Loan does not provide a loan credit for sweat equity – all work must be done by an approved professional contractor.

While there are a lot of perks to go with a homestyle renovation loan, it is not the loan to go after if your credit is bruised or sub-par or luxury renovations will be made. FHA 203k is best bet for bruised credit and a lower down payment.

$548,250 is the maximum loan amount allowed for Homestyle Renovation Loans as it is the maximum conventional loan limit.

What Work Does the Homestyle Renovation Loan Cover?

Delaware HomeStyle Renovation Loan - Architect

When it comes to renovations, the Delaware HomeStyle Renovation Loan offers a generous range of costs for inclusion in the loan including:

  • Architects and/or designer expenses
  • Assessments for Energy efficiency
  • Updates to Engineering and Interior Design
  • Inspections
  • Permit fees

While there aren’t any restrictions on types of repairs allowed or a minimum cost required, all repairs and upgrades must be affixed to the actual property. All improvements must also add some type of value to the home. for the repairs.

All renovation professionals must be lender approved. Contractors and architects with professional licenses are allowed to prepare the necessary drawings and plans before the loan is awarded. This way, underwriters are able to determine the complete value of the property and to make sure all upgrades will be cost effective.

The renovations are required to begin once the loan closes. An appraiser will inspect all work, submitting a completion certificate to Fannie Mae once satisfied. Funds will be held until this certificate is sent out to any workers/designers or architects.  All planned renovations must be completed within six months after the date of closing. Any upgrades have within 100 days of closing to be completed. Funds left over after the renovations are done can be paid into the principal.

What Type of Repairs/Renovations Does a HomeStyle Loan Cover?

The Homestyle Rehab Loan will allow for the following Repairs and/or Renovations:

  • Roofs, Gutters, Down Spouts
  • Heating and Cooling Systems
  • Plumbing and Electrical Systems
  • Kitchen and Bathroom Remodeling
  • Basement Remodeling
  • Expanding Attics
  • Room Additions and Garages
  • Window and Door Replacement
  • Carpet and Flooring
  • Painting and Siding
  • Mold and Lead Paint Abatement
  • Foundation and Water Damage
  • Well and Septic Systems
  • In-ground pools, patios and porches

How Do I Apply for a Conventional HomeStyle Renovation Loan?

Think the Delaware Homestyle Renovation Loan is right for you (or want to hear your other options)? Call the John Thomas Team at 302.703.0727 or Apply Here to learn more about your renovation home loan options.