You found a classic Tudor in the M‑Streets that needs love, but the renovation rules and loan choices feel like a maze. You are right to pause. Greenland Hills is a conservation district with extra review steps, and the right financing can keep your project moving when timing and cash matter most. In this guide, you will compare FHA 203(k) and Fannie Mae HomeStyle Renovation with the realities of M‑Streets permitting, design review, and draw schedules. Let’s dive in.
M‑Streets renovation reality
Most M‑Streets homes date to the 1920s through 1940s. The neighborhood is a City of Dallas conservation district, so many exterior changes require a Conservation District Work Review before or alongside permits. Review the neighborhood’s guidance in the Greenland Hills conservation resources on the M‑Streets association site.
Plan for City of Dallas permits and electronic plan review, plus required inspections before closeout. The City outlines what needs permits and how plan review works in its building inspection FAQs. These steps can affect your draw schedule, so build extra time into your loan and contractor timeline.
FHA 203(k): what to know
What it funds
FHA 203(k) combines your purchase or refinance with renovation funds in one mortgage. The Limited 203(k) is for non‑structural projects, and the Standard 203(k) is for larger or structural work. HUD provides the program overview on its 203(k) page and a basics guide with recent updates, including the higher Limited cap, at 203(k) basics.
Who can use it
203(k) is for owner‑occupants, qualified nonprofits, or local governments. Investors and second homes are not eligible. Eligible properties include 1 to 4 unit owner‑occupied homes and approved condos for interior work. See HUD’s program details at 203(k) eligibility.
Costs and insurance
Minimum down payment is generally 3.5 percent for qualified borrowers. FHA loans require an up‑front mortgage insurance premium, often 1.75 percent of the base loan amount, plus annual mortgage insurance. MIP amounts and duration depend on loan size, term, and LTV, which is different from conventional PMI. Review FHA mortgage insurance basics at FHA MIP guidance.
Process and timing
Renovation funds are escrowed and released in draws. Standard 203(k) requires a HUD‑approved consultant who writes the scope, inspects draws, and signs off on completion. Work must start promptly after closing and finish within program limits, which HUD recently extended. The consultant and lender will expect permits and conservation approvals to align with each draw.
HomeStyle Renovation: what to know
What it funds and limits
HomeStyle is a conventional, single‑close loan that finances purchase or refinance plus renovations. For purchases, lenders can finance up to 75 percent of the lesser of the purchase price plus renovations or the as‑completed appraised value. Many permanent improvements are eligible, including additions and accessory dwelling units where allowed by local zoning. See Fannie Mae’s product details at HomeStyle Renovation.
Who can use it
HomeStyle works for primary homes, one‑unit second homes, and one‑unit investment properties, subject to down payment and reserve rules. See occupancy and eligibility in Fannie Mae’s Selling Guide section.
Down payment and PMI
Conventional underwriting applies. Many lenders offer as low as 5 percent down for a one‑unit primary residence, with higher down payments for second homes and investors. Loans with less than 20 percent down require private mortgage insurance, which is usually cancellable when you reach about 80 percent LTV.
Process and timing
Funds are held in escrow and released through inspections. Most work must be done by licensed contractors, and limited do‑it‑yourself labor may be allowed on certain one‑unit projects. Fannie Mae requires completion within 15 months from closing, with limited extensions. Coordinate permit timing and conservation approvals so inspections and draws stay on schedule.
203(k) vs HomeStyle: quick comparison
- Occupancy
- 203(k): Owner‑occupant only.
- HomeStyle: Primary, one‑unit second home, and one‑unit investment eligible.
- Down payment and credit
- 203(k): Often 3.5 percent down for qualified borrowers.
- HomeStyle: Often 5 percent down for a one‑unit primary, higher for second homes and investors. Conventional credit expectations apply.
- Loan limits and sizing
- 203(k): Subject to FHA county limits. Check Dallas County at FHA loan limits.
- HomeStyle: Must fit conforming limits. The FHFA posts annual values at conforming loan limits.
- Mortgage insurance
- 203(k): Up‑front MIP plus annual MIP, rules vary by term and LTV.
- HomeStyle: PMI when LTV is above 80 percent, usually cancellable near 80 percent LTV.
- Oversight and draws
- 203(k): Standard requires a HUD consultant and multiple inspections.
- HomeStyle: Lender controls draws and inspections, licensed contractors typically required.
Which program fits common M‑Streets scenarios
- You plan to live in the home and tackle structural or system work with limited cash to close. 203(k) often fits best because of the lower down payment and consultant‑supported draw process.
- You want a second home or an investment property in M‑Streets. HomeStyle is usually the path since 203(k) is for owner‑occupants only.
- You are targeting high‑end finishes or an addition like an ADU where zoning allows it. HomeStyle can be a better match for broader improvements and conventional underwriting.
- Your project plus purchase approaches loan limits. Compare the property’s needs against FHA limits in Dallas County and the current conforming limit to see which cap works better for your budget.
How to choose in M‑Streets: a simple plan
Confirm eligibility and limits. Review HUD’s 203(k) overview and Fannie Mae’s HomeStyle guide, then compare Dallas County FHA and conforming limits to your target price and scope.
Define the scope and get bids. Ask for line‑item contractor bids that separate materials and labor, and include a 10 to 20 percent contingency for older homes.
Map conservation district steps. If you plan exterior changes, start your Conservation District Work Review early using the M‑Streets conservation page.
Align permits with draws. Use the City’s building inspection FAQs to plan permit sequencing and inspections, then share that plan with your lender.
Compare total cash to close. Add up down payment, closing costs, prepaid items, and any fees the lender will not finance. For 203(k), confirm how UFMIP and consultant fees are handled.
Line up oversight. Standard 203(k) requires a HUD‑approved consultant. You can search the roster at HUD’s consultant directory. For HomeStyle, confirm contractor licensing and inspection requirements with your lender.
Pro tips for smoother closings
- Build time for design exhibits and reviews. Lenders will want evidence of conservation and permit approvals before releasing certain draws.
- Keep your scope realistic. Historic details and specialty trades can add cost and time, so price them early and include contingency.
- Ask about lender overlays. Minimum credit scores, reserves, and draw policies can vary by lender on both programs.
- Watch the timeline. 203(k) and HomeStyle have completion deadlines, so align your contractor schedule and permit cadence before you close.
Ready to weigh these options against a specific M‑Streets home, scope, and budget? Reach out to Lardner Group for local guidance that connects financing, design review, and a buildable timeline.
FAQs
What is the main difference between FHA 203(k) and HomeStyle for M‑Streets buyers?
- 203(k) is an FHA loan for owner‑occupants with low down payment and structured consultant oversight, while HomeStyle is a conventional option that also works for second homes and one‑unit investment properties.
Can investors use renovation loans in M‑Streets?
- Yes with HomeStyle, which allows one‑unit investment properties under conventional rules. FHA 203(k) is limited to owner‑occupants and qualifying nonprofits or local governments.
How do conservation district reviews affect renovation loan timelines in M‑Streets?
- Exterior work often needs a Conservation District Work Review and City permits, which can add steps before draws are released. Build those approvals into your schedule so lender inspections and disbursements stay on track.
What down payment should I expect for each program?
- 203(k) commonly allows 3.5 percent down for qualified borrowers. HomeStyle is often 5 percent down for a one‑unit primary residence, with higher requirements for second homes and investment properties.
Do these loans cover high‑end finishes or an ADU in M‑Streets?
- Both can finance a wide range of improvements. HomeStyle is often preferred for broader, design‑forward upgrades and additions like ADUs where local zoning allows them, while Standard 203(k) is strong for structural and health or safety repairs.
