Fannie Mae HomeStyle Loans

The Fannie Mae HomeStyle program is intended for homebuyers who are interested in purchasing a home in need of moderate renovation or simply for homeowners who already own a Fannie Mae-approved home and would like to have it undergo renovations may try and qualify for additional funds through this program.

HomeStyle Loan Requirements

The HomeStyle loan program through Fannie Mae has many advantages for eligible borrowers, such as:

• Streamline, less paperwork
• 2-in-1 single loan transaction.
• Lower interest rates than the standard home improvement loan.
• Flexible mortgage term options with 15 or 30 years.
• Does not require mortgage insurance (MI) if LTV is 80% or below.
• LTV is taken into consideration after renovation is completed (great for underwater homeowners).

To find out more information on how to qualify for a Fannie Mae HomeStyle Loan, feel free to give us a call at and one of our Fannie Mae approved mortgage professionals will be willing to answer any questions you may have.

Benefits Of Fannie Mae HomeStyle Loan

With the HomeStyle Mortgage, the minimum loan amount is $50,000 and the maximum loan amount is in reference to the conforming loan limit ($471,000). Repairs and renovations must be completed within 6 months and cannot exceed 50% of the after improved appraised value.

With the Fannie Mae HomeStyle loan, there are many benefits that a homebuyer can reap such as:

• Qualifying for the loan based on the as-completed value of the property.
• Many borrowers are able to take advantage of low first mortgage interest rates and are able to do numerous types of improvements or repairs in their desired home of purchase.
• Finance mortgage payments up to 6 months to cover any non-occupancy costs during construction.
• With the lender involved in the construction oversight and monitoring, it can provide added value to borrowers.

Eligible Fannie Mae Homestyle Properties

• 1-4 unit newly built or constructed (attached/detached).
• 1-unit manufactured homes.
• 1-4 unit existing site-built home (attached/detached).
• Approved (Fannie Mae-warrantable) Condominiums, Cooperative, and PUD units.

The Fannie Mae HomeStyle loan is available for purchase of primary residence, a second home, or investment property.

*Important: Manufactured homes must be newly purchased and never previously attached to a foundation and must meet all requirements of Fannie Mae HomeStyle.

Down Payment Requirement

Down payment for Fannie Mae’s HomeStyle program is as low as 3% , but is usually 20% required if you choose to not have mortgage insurance.

Loan-to-Value (LTV) Requirement

The LTV required for a HomeStyle loan is up to 95% for primary residences, up to 90% for second home and up to 75% for investment properties.

Debt-to-Income (DTI) Ratio Requirement

Typically, for a Fannie Mae HomeStyle loan, a borrower must not exceed 45% DTI.

Minimum Credit Score

With a LTV greater than 80%, a 700 minimum credit score is required. If the LTV is less than or equal to 80%, a credit score of 680 minimum is required primary residences and second homes.

For investment properties usually borrowers with salaried income must have a minimum credit score of 720 to be considered eligible. Self-employed/commissioned borrowers a minimum credit score of 680 is required.

Please keep in mind that all renovation work must be completed by a licensed contractor, although Fannie Mae does allow for a “Do It Yourself” (DIY) renovation option as long as the buyer receives lender approval for this option and a 10% contingency reserve of the renovation amount is required as well.

A contingency reserve is an amount of money established from a retained earnings to allow for unforeseen losses or damages during the renovation process.

Let's Talk About Renovation Lending Options

See which Renovation Mortgage Program your scenario or property may be eligible for.

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