Here’s how these programs compare on important factors like loan size, occupancy eligibility, allowable improvements, and more.

Loan Amounts and Property Types

  • HomeStyle® & CHOICERenovation®: Max $806,500 unless county limits are higher. Eligible for primary, second homes, and investment properties.
  • FHA 203(k): Max $498,257 (or $524,225 for cases after Jan 1, 2025). Primary residences only.

Maximum LTV

  • Conventional Loans: Up to 97% for 1-unit primary homes (HomeStyle only). Lower limits for second homes and investment properties.
  • FHA 203(k): 96.5% LTV for purchases and 97.75% for refinances across all unit counts.

Renovation Cost Guidelines

  • HomeStyle & CHOICERenovation: No cap on renovation costs.
  • Limited 203(k): Min $5,000 and max of $75,000 (for case numbers after 11/4/24).
  • Standard 203(k): Min $5,000, no set maximum.

Renovation Loan Comparison 2025: Special Program Considerations

ADU (Accessory Dwelling Unit) Improvements

  • CHOICERenovation®: Most flexible, allowing ADUs on 1–3 unit properties.
  • HomeStyle®: Allows ADUs on 1-unit properties only.
  • FHA 203(k): Limited 203(k) does not allow ADUs; Standard 203(k) permits attached or detached ADUs.

Disaster Mitigation Renovations

  • CHOICERenovation® and FHA Standard 203(k): Allow upgrades for future disaster protection (e.g., storm barriers, earthquake retrofitting).
  • HomeStyle® and Limited 203(k): Do not allow disaster mitigation updates.

Self-Help and Initial Draws

  • All Programs: Borrowers may only purchase materials or appliances themselves; labor must be completed by a licensed contractor.
  • HomeStyle® and CHOICERenovation®: Allow up to 50% initial draw on materials; FHA Standard does not.

Consultant Requirements

  • FHA Standard 203(k): Always required.
  • HomeStyle & CHOICERenovation: Only required for structural work, if payments are financed, or if contractor lacks renovation loan experience.

Which Renovation Loan is Right for You in 2025?

The right program depends on your project type and goals. FHA 203(k) is ideal for primary residences and first-time buyers needing low down payment options. HomeStyle® and CHOICERenovation® are best suited for borrowers needing flexibility—especially investors or second-home buyers.

At North Star Mortgage Network, we help guide you through every option and match you with the loan that makes the most sense for your property and financial goals.

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