The Fannie Mae HomeStyle Loan is a Conventional Renovation Loan available for both purchase and refinance.
This single-close loan provides funds to purchase plus the funds to complete major or minor renovations with one loan and one loan closing. Loans are based on after-improved value determined by appraisal.
Very few lenders offer this program. It is available for owner occupants, investors, and second homes buyers.
The HomeStyle renovation loan can be used for virtually any type of renovation improvement. The only renovation criteria that must be met is as follows:
- Improvements must be permanently affixed to the property.
- Improvements must add value to the property.
The loan allows luxury home improvements like swimming pools that are not allowed under the FHA 203k program.
HomeStyle Loan Program Benefits
- 5% down based on purchase and renovation costs for owner occupied purchase loans.
- One-to four unit financing for owner occupied, second homes, and investors.
- No minimum renovation loan amount and loan amounts up to $417,000.
- Investor fix and flip or buy-fix-hold loan without hard money rates.
- Ideal for distressed homes sold as-is or non-distressed home that need updating.
- Repairs can total 75 percent (with some lenders) of the as-completed value of the property allowing for major renovations, scrapes, and total rebuilds.
- Customers have full use of contingency reserve funds after majority of scheduled renovation have been completed.
- Ability to Purchase and Renovate with one loan, saving you cash after closing.
- Refinance and renovate and reduce your interest rate.
- No required improvements (property must meet minimum appraisal standards) and limited restrictions on the types of repairs, giving you TOTAL flexibility to make your dream home your reality.
- Allows funds for luxury items such as outdoor kitchen and living areas, swimming pools, spas or saunas.
- Flexible loan terms including 30yr and 15yr fixed, adjustable rates including the 3/1, 5/1, 7/1, and 10/1 loan terms.
Let’s take a look at the benefits of the loan for an owner-occupied purchase. Note: Investor LTV = 80% and Second Home = 90%.
Buyer found a home in a location they like that was in a great location but needed a little updating. Their contractor and designer helped them plan all the details of their renovation.
They closed on one loan that included funds to purchase the home and a renovation budget to update the home after closing. Upon completion of their renovation, they moved into a fresh updated home in a great location.
As a result of their upgrades, the home now appraises for $14,130 more than their total acquisition and renovation costs creating instant equity.
As you can see, this program has endless possibilities for owner occupants, investors, and second home buyers. Distressed pricing in the current market creates the potential to pick up instant equity using this loan program.
It is the best time in history to take advantage of historically low rates, low prices, and potential to build long term wealth. This is a once and a lifetime opportunity to use a program like this to build your wealth and live the lifestyle of your dreams.
Whether you are purchasing a new home to renovate or refinancing an existing home to renovate you should consider the FNMA Homestyle loan option.
Contact us today if you have questions about the FNMA HomeStyle Loan.
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