Fannie Mae's HomeStyle Renovation loan and the U.S. Department of Housing and Urban Development section 203(k), both allow qualified borrowers to purchase, refinance or renovate with one loan. This type of loan is not for the construction of new houses, but rather to renovate and update existing homes. This program allows for greater flexibility by basing the loan arrangement on the property's value after the renovation has been completed. A renovation loan allows you to buy and remodel with one loan. You'll have one mortgage, one closing, and one monthly repayment. You will need to make a down payment and may also have to purchase mortgage insurance. Private Mortgage Insurance is required for HomeStyle transactions with loan-to-values exceeding 80%. The 203K program does not require Mortgage Insurance. It is possible to make improvements immediately to your house without having to draw on your savings. The interest you pay on the loan, like all mortgages, is tax-deductible.