Fannie Mae HomeStyle Mortgages

Fannie Mae HomeStyle Mortgages at BFR

Based in New York City for Over 15 years, BFR is an expert in renovation loan financing. We will walk you through ways which a Fannie Mae HomeStyle can be more favorable renovation mortgage than an FHA 203K mortgage.

What Is a HomeStyle Mortgage?

  • The HomeStyle Mortgage allows the borrower to receive a purchase mortgage or a limited cash-out refinance mortgage while receiving funds to cover the costs of repairs, renovations, remodeling or energy improvements to the property
  • Single loan (one closing!) for refinance or purchase loans. The loan amount is based on the after-completed value (ACV) of the property rather than the present value.
  • The limit on eligible renovation funds for a purchase transaction has been increased to 75% of the lesser of acquisition plus renovation costs OR the as-completed value.
  • The limit on eligible renovation funds for a refinance is up to 75% of the “as-completed” appraised value.
  • Self-funding of additional renovation costs above this limit is prohibited by FNMA, as it may cause the amount of renovation to become unacceptable relative to the value of the property itself.
  • Borrower may escrow up to 6 months PITI if home is uninhabitable during the renovation period.
  • Mortgage Insurance is required for LTV’s ≥ 80.01%
  • There are no required improvements or a minimum dollar amount for the repairs.
    • Repairs or improvements; however, must be permanently affixed to the real property.
    • Transaction may only cover the cost of repairs, remodeling, renovation or energy improvements
  • To ensure that the borrower understands all the terms of the HomeStyle Renovation mortgage, BFR’s lenders require the HomeStyle Renovation Consumer Tips disclosure be provided to the borrower.
    • This disclosure can be used as a checklist for the key facts that need to be disclosed to the borrower, and the borrower signature will serve as an acknowledgement of his or her understanding of the facts.
  • For transactions that will involve the addition of livable units within the subject property, the maximum loan amount of the transaction must adhere to the current maximum loan limit based on the current as-is status of the subject property. Please contact us for more information on Fannie Mae HomeStyle loans

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