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By Leila Lajevardi • September 18, 2018

New Opportunities for Home Renovation

Fannie Mae has released a new opportunity offering loans for home renovations called the Fannie Mae Homestyle Renovation Program. The eligibility varies per Fannie Mae county limits however, primary occupancies for purchase or limited cash-out refinance will offer a loan amount of up to $453,1000. For second homes and investment properties, Fannie Mae will offer up to 75% of the estimated value of the renovation amount.


The core guidelines for this program are pretty straightforward. The product fixed years correlates with the term (years); meaning that a high balance fixed 15 equates to 15 years. Ineligible transactions include combined HomeStyle with HomeReady, ‘do it yourself’ options and HomeStyle Energy transactions. Properties including manufactured homes, mixed use, one lot/parcel with two separate dwellings, complete tear-down and reconstruction of properties are ineligible options for this renovation program.


While this may seem limiting, eligible properties and opportunity outweigh the ineligible. For example, condominiums, modular homes and new or existing properties all qualify as eligible. Eligible improvements must be affixed to the real property and include completing the final work on a newly built home when the home is AT LEAST 90% complete and additionally may be used to construct various outdoor buildings.


The underwriting follows normal Fannie Mae guidelines - meaning that manual underwriting is not permitted. The appraisal must be ordered through any Home Point-approved AMC and must include subject to completion with an after-improved value, two comps within 90 days, C4 condition or better when complete, and all pages of bid attached to the report and commentary on whether utilities were on and functioning. Standard origination charges will apply and supplemental ordination must be included in your maximum loan amount.


For more information on loan product specific fees, contingency reserves, escrowed mortgage payments, project inspectors, and regarding the payment of your contractor and rehabilitation period, head to Fannie Mae’s site to learn more.  

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