Fannie Mae HomeStyle Renovation General Guidelines
- This loan allows a customer to finance the purchase price or the existing balance and the cost of improvements into one loan amount.
- The loan amount is determined by using the after-improved value of the property.
- Can lend up to 95% – 97% of after improved value up to Conforming loan limits
- One-time close fully amortized transaction.
Benefits of a Fannie Mae HomeStyle Renovation
- All Renovations are completed after closing by the buyer/homeowner selected Contractor.
- Renovation funds are held in a Fully Funded Interest Bearing Escrow Account and disbursed as the work is completed.
- 1-4 units properties allowed
- Owner Occupied 1-Unit Up to 95% – 97% LTV
- 3-4 unit – Owner Occupied Up to 75% LTV
- 2nd Homes 1-Unit Up to 90% LTV
- Investor 1-Unit 75% to 85% LTV
Fannie Mae HomeStyle Renovation Additional Info
- Any repairs borrowers choose are allowed, excluding any outbuildings (minimum required repairs at lender discretion if required)
- Luxury Items, including hot tubs and pools, are allowed
- Any required health and safety issues that would be identified by an appraiser would be required
- Feasibility Inspection required from 3rd party Feasibility inspection company depending on lender & renovation budget/repairs
More About Fannie Mae HomeStyle Renovation
- Completed work & Inspections required prior to draw payments to Contractor (Maximum 5 Draws)
- Maximum Total allowed Renovation Costs is limited to 75% of after improved value (includes contingency, inspections, & fees)
- No property age restrictions but property typically must be considered substantially complete (lender discretion)
- Minimum 10% contingency typically required (lender discretion)
- Up to 6 months payments may be financed in the loan
