The FHA 203(k) loan is a government-backed renovation mortgage that lets you purchase or refinance a home AND finance the renovation costs all in one single loan. There are two types: the Standard 203(k) for major structural repairs (minimum $5,000 in renovations) and the Limited 203(k) (formerly Streamline) for cosmetic upgrades up to $35,000. Eligible improvements include roofing, plumbing, electrical, HVAC, flooring, kitchens, bathrooms, accessibility upgrades, and more. Minimum credit score: 580 with 3.5% down. Available for 14 unit properties, condos, and mixed-use properties. This is the most widely used renovation loan in the country.

The Fannie Mae HomeStyle Renovation loan is a conventional mortgage that combines a home purchase or refinance with renovation financing into one single loan. Borrow up to 75% of the home’s as-completed appraised value to cover both the purchase price and renovation costs.

Key Benefits:

Available for primary residences, second homes, AND investment/rental properties

No minimum renovation amount required

Luxury upgrades allowed (pools, outdoor kitchens, landscaping)

One loan, one closing, one monthly payment

Private mortgage insurance (PMI) can be removed once you reach 20% equity

Eligibility Requirements:

Minimum 620 credit score

Loan amounts follow conventional conforming loan limits

Renovation work must be completed by a licensed contractor

Funds held in escrow and released as work is completed

How It Compares to the FHA 203k:

HomeStyle allows investment properties; 203k does not

HomeStyle permits luxury improvements; 203k focuses on livability

HomeStyle requires higher credit score (620 vs 580 for 203k)

HomeStyle avoids FHA mortgage insurance premiums for well-qualified buyers

Best For: Buyers with good credit who want conventional financing flexibility, investors renovating rental properties, or homeowners adding premium upgrades.

VA Renovation loans allow eligible veterans, active-duty service members, and surviving spouses to finance a home purchase AND renovation costs in a single loan with no down payment required and no private mortgage insurance (PMI).

Key Benefits:

Zero down payment for eligible veterans

No private mortgage insurance (PMI) required

Competitive interest rates backed by the VA

One loan, one closing for both purchase and renovation

Can be used to bring a home up to VA Minimum Property Requirements (MPRs)

Eligibility Requirements:

Must be a veteran, active-duty service member, National Guard/Reserve member, or eligible surviving spouse

Valid Certificate of Eligibility (COE) required

Minimum 620 credit score (lender requirement may vary)

Property must be the borrower’s primary residence

Work must be completed by a licensed, VA-approved contractor

Eligible Renovation Types:

Repairs required to meet VA Minimum Property Requirements

Roofing, plumbing, electrical, HVAC systems

Structural repairs and energy efficiency upgrades

Accessibility modifications for disabled veterans

Kitchen and bathroom updates

Best For: Veterans who want to buy ayment required and no private mortgage insurance (PMI).a fixer-upper with no down payment, or those who need to bring a property up to VA standards before closing.

The USDA renovation program helps low-to-moderate income homebuyers purchase and repair homes in eligible rural and suburban areas with zero down payment and below-market interest rates.

Key Benefits:

Zero down payment for eligible borrowers

Below-market fixed interest rates

Combines purchase and renovation into one loanrogram helps low-to-moderate income homebuyers purchase and repair homes in eligible rural areas with zero down payment.

Grants available for very low-income homeowners age 62 and older