Renovation Loans in Florida: FHA 203(k) and HomeStyle for Fixer-Uppers

Renovation loans Florida buyers use most often are the FHA 203(k) and Fannie Mae's HomeStyle Renovation. Both let you buy a fixer-upper and roll the repair costs into one mortgage, so you do not need a separate cash budget or a second loan. That matters in Palm Beach County, where many older homes need a new roof, updated wiring or a kitchen before they feel livable. This guide compares the two programs, explains the contractor and timeline rules, and points out where fixer-uppers tend to show up locally.

Key takeaways

• FHA raised the Limited 203(k) cap from $35,000 to $75,000 in 2024 and now reviews that cap each year.
• FHA's 2024 update also set the rehab period at 12 months for the Standard 203(k) and nine months for the Limited 203(k).
• Fannie Mae's HomeStyle Renovation has no minimum dollar amount, allows a maximum LTV up to 97%, and ties the renovation budget to a 75% limit based on the lower of cost or as-completed value.
• HomeStyle lets one-unit owners do some work themselves, capped at 10% of the as-completed value.
• In Lake Worth Beach's historic districts, most exterior work needs a Certificate of Appropriateness before a building permit can be issued.

How renovation loans in Florida work

A renovation loan is a mortgage based on what the home will be worth after the work is done. The lender orders an appraisal using your plans and bids, then sets the loan amount from that "as-completed" value. At closing, you buy the home. The repair money goes into an account that the lender controls.

From there, the lender pays the contractor in stages, called draws, as the work is finished and checked. When the last draw is paid and the final inspection passes, the account closes. Any money left over usually goes to pay down your loan balance.

This setup protects both you and the lender. The contractor gets paid for work that is done, and the house that secures the loan gets better rather than worse.

FHA 203(k) renovation loans for Florida buyers

The 203(k) program is part of FHA, so it follows FHA's credit and down payment rules. It is meant for owner-occupants, which means you must plan to live in the home. It comes in two versions.

Limited 203(k)

The Limited version is for smaller, non-structural projects such as a new roof, flooring, a kitchen update or new windows. Under Mortgagee Letter 2024-13, FHA raised the maximum total rehab cost from $35,000 to $75,000. It also said it will review that cap every year, so ask your lender for the current figure.

The same update gave Limited borrowers nine months to finish the work. It also allowed up to 30 days in which you cannot live in the home during the work, up from 15. In addition, you can now finance a 203(k) consultant's fee on a Limited loan if you choose to use one.

Standard 203(k)

The Standard version handles larger jobs, including structural work like moving walls or adding rooms. It requires a HUD 203(k) consultant, who inspects the home, writes up the work and checks progress before draws are paid. FHA's 2024 update set a 12 month rehab period for the Standard loan. It also let lenders allow more months of mortgage payments to be financed while you are out of the house.

Your total loan must still fit under the FHA loan limit for the county. You can look up the current Palm Beach County limit with HUD's online lookup tool. For a deeper look at this program alone, read our full guide to the FHA 203k loan.

Fannie Mae HomeStyle Renovation

HomeStyle is a conventional loan backed by Fannie Mae. Many buyers with stronger credit choose it because it avoids FHA mortgage insurance rules and offers more flexibility on the type of work.

Here are the main points from Fannie Mae's program page:

• You can renovate almost any part of the home, including roofs and bathrooms, or add an accessory unit such as an in-law suite.
• There is no minimum dollar amount for the work.
• The maximum loan-to-value ratio goes up to 97%.
• For purchases, the program applies a 75% limit tied to the lower of the purchase price plus renovation costs, or the as-completed appraised value.
• The home does not have to be livable at closing. If it is not, you may finance up to six months of principal, interest, taxes and insurance while you are out.

Freddie Mac offers a similar conventional product called CHOICERenovation. Lenders that do one often do the other, so ask which fits your plan.

Contractor and DIY rules for renovation loans in Florida

Both programs care a lot about who does the work. With either loan, the lender reviews your contractor before closing. Expect to provide a license, insurance, a detailed bid and a timeline. Florida also requires most construction work to be done by a licensed contractor, and your local building department will issue permits based on the plans.

HomeStyle allows some do-it-yourself work on one-unit homes, though not on manufactured homes. Fannie Mae caps DIY work at 10% of the as-completed value, and the lender must approve it first. You can be reimbursed for materials and for documented contract labor, but not for your own time. The 203(k) program is much stricter, so plan on hiring a contractor for most FHA projects.

Picking a contractor who can handle loan paperwork

Renovation loans move slower than cash jobs. Contractors must wait for draw inspections before they get paid, and change orders need approval. Ask each contractor whether they have worked with 203(k) or HomeStyle loans before. One who knows the process will price the job and the schedule more accurately.

Timelines for renovation loans in Florida

A renovation loan usually takes longer to close than a standard mortgage. The lender needs your plans, bids and contractor documents before it can order the as-completed appraisal. Build that extra time into your contract, and talk with your agent about a longer financing period.

After closing, the clock on the work starts. FHA allows 12 months for a Standard 203(k) and nine months for a Limited 203(k). Fannie Mae does not require the home to be livable at closing, which helps with bigger jobs.

Local reviews can add time too. Permit review, HOA architectural approval and historic review all happen before work can start. Also, line up homeowners insurance early, because many insurers look closely at the age of the roof and other systems on older homes.

Where fixer-uppers are common locally

Fixer-uppers show up in many places, but older neighborhoods have more of them. In Lake Worth Beach, for example, the city has six local historic districts: College Park, Old Lucerne, Old Town, Northeast Lucerne, Southeast Lucerne and South Palm Park. Homes there can have older roofs, plumbing and windows, and a renovation loan can bundle those updates into the purchase.

Historic rules add a step. Lake Worth Beach says a Certificate of Appropriateness is required before exterior work begins and before a building permit can be issued for a property in a historic district. So check whether a home sits in a district before you write your bids and timeline.

Older parts of West Palm Beach and other coastal cities also have homes from the early and middle 1900s. On the other hand, newer western suburbs tend to have fewer fixer-uppers, since much of that housing is younger.

Choosing between renovation loans in Florida

An FHA 203(k) often suits buyers with lower down payments or credit scores that fit FHA rules better. It works for a broad range of repairs, but it comes with more rules and paperwork.

HomeStyle often suits buyers with stronger credit who want more freedom on the scope of work, including luxury items or an in-law suite. It also allows limited DIY work. Because it is conventional, mortgage insurance can be removed later under the usual conventional rules.

The best approach is to get quotes for both. Then compare the rate, fees, mortgage insurance and total cash to close side by side.

Questions to ask a renovation lender

Not every lender offers these loans, and some close only a few each year. So ask a few questions before you apply:

1. How many 203(k) or HomeStyle loans have you closed in the past year?
2. Who manages the draws, and how fast are contractors paid after an inspection?
3. What documents do you need from my contractor, and when?
4. How long does the as-completed appraisal usually take right now?
5. What happens if the work costs more than the bid?

Clear answers will tell you a lot about how smooth the process will be. A lender who does these loans often can also help you set a realistic closing date in your contract.

Frequently asked questions

What are the main renovation loans in Florida?

The most common are the FHA 203(k), in Standard and Limited versions, and Fannie Mae's HomeStyle Renovation. Freddie Mac's CHOICERenovation is another conventional option.

How much can I borrow for repairs with a Limited 203(k)?

FHA raised the cap to $75,000 in 2024 and reviews it each year. Ask your lender for the current limit before you plan your project.

Can I do the work myself?

With HomeStyle, sometimes. DIY work is allowed on one-unit homes up to 10% of the as-completed value, with lender approval. The FHA 203(k) generally expects a contractor to do the work.

Do renovation loans in Florida take longer to close?

Usually, yes. The lender needs plans, bids and contractor documents before the appraisal. Permits, HOA approval and historic review can add more time.

Can I live in the home during the work?

Often, yes. A Limited 203(k) allows up to 30 days out of the home. HomeStyle lets you finance up to six months of payments if the home is not livable.

Sources

• HUD, FHA INFO 2024-44 on 203(k) program updates
• HUD, Mortgagee Letter 2024-13
• HUD, FHA mortgage limits lookup
• Fannie Mae, HomeStyle Renovation
• City of Lake Worth Beach, historic preservation
• City of Lake Worth Beach, historic districts

This article is general information, not legal, tax or financial advice. Loan programs and limits change, so speak with a licensed mortgage professional about your own situation.

Own an older home you are thinking of selling? Find out what it is worth as it stands with a free home value report. Buying a fixer-upper? Schedule a buyer strategy call and we will help you find homes that fit a renovation loan and plan your offer around the timeline. Talk with our team.