HomeStyle / CHOICE Renovation Loans: What to Know
Get access to financing for renovations and improvements without taking out a second loan or line of credit with a HomeStyle or CHOICE Renovation Loan. See how this program works below.
What Is a HomeStyle / CHOICE Renovation Loan?
Available for purchase or refinance
Borrowers have the option to roll renovation costs in with either the purchase of a new home or the refinance of an existing one.
High Loan-to-Values
These programs also offer high LTVs, which allows borrowers to finance a larger percentage of the home's value.
Flexible property types
HomeStyle/CHOICE Renovation Loans are available for many property types, including single-family homes, townhouses, and some manufactured homes.
What Can a HomeStyle / CHOICE Renovation Loan Be Used For
To buy a fixer-upper
If you come across a great deal on a home that needs repairs, this program makes it easy to snap up the property and make updates with a single mortgage.
To make accessibility or energy-efficient modifications
Whether you're buying a house or refinancing one, you can roll the costs of things like solar panel or wheelchair ramp installation into your primary loan.
To cover unexpected repairs revealed during an inspection
When an inspection reveals unplanned repairs, a HomeStyle/CHOICE loan can be used to pay for new roofing, plumbing updates, and other obstacles to purchase.
Pros
- Flexible loan terms
- Increase home value
- Pay closing costs once
Cons
- Renovation plans and contractor bids may be needed
- Some types of renovations may not be covered
- Appraisal and inspection fees may be required
- Must complete renovations within a specific time frame
Talk to our mortgage experts today about finding the right loan for you.
Alternatives to a HomeStyle / CHOICE Renovation Loan
- Attractive down payment options
- Loan limits based on location
- Must be used for primary residences
- Backed by the Federal Housing Administration
- Borrow, repay, and borrow again like a credit card
- Offers a long repayment period
- Use the funds for any purposeÂ
- Interest may be tax-deductible if used for home updates Â
- Allows you to access your existing home equity
- Get a lump sum of money when you close
- Offers both fixed and adjustable-rate options
- May have closing costs
How Do I Know If a HomeStyle / CHOICE Renovation Loan Is Right for Me?
You need to do extensive renovations
If the updates you need to make to your existing home or the home you’re buying are major or structural, a HomeStyle or CHOICE Renovation loan could be a good fit.
You have a sufficient down payment or equity
This program requires borrowers to either have a down payment for a new property or sufficient equity for refinancing.
You plan to stay in your homeÂ
If you plan on living in your home long-term, the HomeStyle/CHOICE loan lets you make major renovations that meet your changing needs and boost your property value.
When Is the Best Time to Take Out a HomeStyle / CHOICE Renovation Loan?
The best time to take out a HomeStyle or CHOICE Renovation loan is when you want to combine your home purchase or refinance and the cost of upgrades into one loan. For example, if you’ve found a charming home that needs new plumbing, electrical work, and cosmetic upgrades, you can use the loan to cover all these costs together. Or, if you’re refinancing after a surgery or major health issue, this program can be used to change your loan terms, make payments more manageable, and cover the cost of installing handrails, widening doorways, and modifying showers.
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FAQ
What’s the difference between a HomeStyle and a CHOICE Renovation Loan?
The HomeStyle loan is backed by Fannie Mae, while the CHOICE Renovation loan is backed by Freddie Mac.
What types of renovations are eligible?
The HomeStyle and CHOICE Renovation Loans can finance a wide range of renovations, including structural repairs, cosmetic updates, and major systems upgrades. Eligible projects can include but are not limited to kitchen and bathroom remodels, roofing, flooring, plumbing, electrical work, landscaping, accessibility modifications, and energy-efficient upgrades such as installing solar panels or new insulation.
Can I use a HomeStyle/CHOICE Renovation loan for refinancing an investment property?
No, HomeStyle/CHOICE Renovation loans are generally only available for primary residences, second homes, and occasionally for multi-family properties that you will occupy. Investment properties are typically not eligible.
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