Purchasing or refinancing a home in need of repairs, maintenance and/or upgrades may seem daunting and costly. With a Fannie Mae HomeStyle® Renovation Loan, it is possible to purchase with a small down payment, follow guidelines of a conventional loan and gain more renovation flexibility than an FHA 203k Loan
The HomeStyle® Renovation Loan allows borrowers to combine a purchase or a rate/term refinance mortgage and financed funds for renovation into a single-close transaction. Funds can cover the cost of repairs, remodeling or renovations to the property.
Benefits
- As little as 5 percent down payment for owner-occupied homes; 20 percent down for investment properties
- As-complete appraisal allows no or low equity homeowners to obtain a renovation refinance
- Updates may include luxury items, such as in-ground pools, tennis courts, hot tubs and basketball courts
- No upfront mortgage insurance
- No minimum amount in repairs required
- Available in fixed-rate mortgages or rate-capped ARMs, fully amortizing with terms between 15 and 30 years
Eligibility and Qualifications
- Available to owner-occupants, purchasers of second homes and investors
- No self-help renovations allowed; must be performed by licensed, registered or certified contractors
- 680 minimum FICO score for owner-occupied properties (700 minimum if self-employed)
- 720 minimum FICO score for investment properties
- Maximum renovation amount cannot exceed 50 percent of the as-completed value
If you are interested in a renovation purchase or refinance, contact your mortgage banker at Compass Mortgage to see if you qualify for HomeStyle® today! For more information regarding all available types of rehabilitation loans, refer to our Rehab Guide.
