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Renovate Your Way to Your Dream Home with the Fannie Mae HomeStyle Loan

Is the idea of buying a home that needs work stopping you from making a move? Or maybe you already own a home but dream of renovations to make it truly yours. Good news: the Fannie Mae HomeStyle Renovation Mortgage is here to make those dreams come true! This versatile loan program allows you to roll the cost of renovations into your mortgage, simplifying the process and turning “someday” into today.

In this article, we’ll explore how this unique mortgage works and why it could be the key to achieving your homeownership goals.

What Is the HomeStyle Renovation Loan?

The Fannie Mae HomeStyle Renovation Loan lets you bundle the purchase or refinance of a property with the cost of renovations. Instead of managing separate loans for home improvements, this program simplifies financing into one monthly payment.

It’s perfect for:

  • Fixer-Upper Buyers who want to transform outdated homes.
  • Current Homeowners planning upgrades without a separate loan.
  • Investors enhancing rental properties.

If you’re looking for an all-in-one solution, the HomeStyle loan is worth considering.

Why Choose the HomeStyle Renovation Mortgage?

This program is packed with benefits that make it stand out. Here are the top reasons it could be right for you:

1.

Increase Property Value

  • Renovations can significantly raise the appraised value of your home, potentially boosting equity.
  • A more valuable property is not only a better investment but also a more enjoyable space to live in.

2.

Eligibility for Various Projects

  • Whether cosmetic or structural, most permanent renovations qualify.
  • Projects can range from updating a kitchen to adding a new roof or even building an extra bathroom.

3.

Multiple Property Types

  • Works for primary residences, second homes, condos, PUDs, and even investment properties.
  • Manufactured homes are also eligible, with a few specific restrictions.

4.

All-in-One Convenience

  • By rolling renovation costs into your mortgage, you avoid juggling multiple loans or dipping into savings.

Loan Amounts and Limits

The HomeStyle loan allows borrowers to finance a percentage of the property’s value, depending on its type and intended use:

  • Single-Family Home (Primary Residence): Finance up to 97% of the value (95% in some cases).
  • Two-Unit Homes: Borrow up to 85%.
  • Three- or Four-Unit Homes: Finance up to 75%.
  • Second Homes: Eligible for financing up to 90% of the value.
  • One-Unit Investment Properties: Borrow up to 85% for purchases and 75% for refinances.

These flexible limits provide a wide range of options for both buyers and homeowners.

What Renovations Are Eligible?

The HomeStyle loan covers a comprehensive list of renovation-related expenses, making it one of the most versatile programs available. Here’s what’s included:

  • Labor and Materials: Covers everything needed for permanent renovations.
  • Architect and Consultant Fees: Includes professional services for project planning.
  • Permits and Inspections: Ensures compliance with local regulations.
  • Contingency Reserves: Helps manage unexpected costs.
  • Payment Reserves: Offers up to six months of mortgage payments if renovations prevent you from living in the home.

How the Process Works

The HomeStyle program is designed to streamline renovations, but there are a few key steps to follow:

1.

Choose Your Contractor

  • You have the flexibility to select a contractor of your choice, provided they meet lender qualifications.

2.

Submit a Detailed Plan

  • Work with a licensed contractor, architect, or renovation consultant to create a detailed outline of the work to be completed.

3.

Renovation Timeline

  • Your contractor must adhere to a pre-approved timeline. Any changes to the plan require lender approval via a HomeStyle Change Order Request.

4.

Start Renovating

  • Once all plans are approved, renovations can begin. Funds are disbursed as work progresses, ensuring accountability.

Ideal Candidates for the HomeStyle Loan

This loan program is tailored for:

  • Homebuyers: Especially those interested in fixer-uppers with potential.
  • Current Homeowners: Perfect for updating your space without the hassle of a second loan.
  • Real Estate Investors: A great way to enhance the appeal and value of rental properties.

Important Considerations

As with any financing program, there are limitations to keep in mind:

  1. No Cash-Out Refinancing: The loan is not intended for pulling out equity at closing.
  2. Renovation Limits: Costs must not exceed 75% of the lesser of:
  • Purchase price + renovation costs, or
  • The appraised “as-completed” value.
  1. DIY Restrictions: Do-it-yourself projects are capped at 10% of the property value for owner-occupied, single-unit homes, and your labor won’t be reimbursed.
  2. Manufactured Home Rules: Renovation costs for these properties are capped at $50,000 or 50% of the home’s value, whichever is less, and structural changes are not permitted.

Why the HomeStyle Renovation Loan Stands Out

Unlike other renovation financing options, the HomeStyle program offers unparalleled flexibility, streamlined financing, and the ability to finance almost any permanent improvement. Whether you’re looking to turn a fixer-upper into a dream home or make impactful upgrades to your current residence, this loan can help you reach your goals.

Ready to Begin Your Renovation Journey?

If the Fannie Mae HomeStyle Renovation Mortgage sounds like the perfect fit for your needs, we’re here to help. Our team is ready to guide you through every step of the process, from application to project completion.

Let’s Get Started

Schedule a consultation today and take the first step toward transforming your home into the space you’ve always dreamed of.

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Reviews

"10/10 service!!!! Wade and his team went above and beyond to make sure we closed on our home. With a few hiccups and hurdles in the last hour they did navigate each step efficiently. I would definitely recommend them to assist with anyone looking to obtain a loan. Thank you 👍🏼"

camellia valenciano

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cynthia green

"In 2015 Wade and his team helped us get into our first home, fast forward 8 years things have changed and due to a divorce hard decisions had to be made concerning the ownership of the house. From the beginning, even though we’ve never met in person Wade and team has given me solid advice over the phone, through annual check in’s and monthly words of inspiration through emails. But the one thing that has stuck with me and I have begun using it in everyday life is when he recently told me. “I am going to tell you what you NEED to hear, not what you WANT to hear.” Going through a divorce isn’t easy but sometimes you need someone like Wade to guide you and even though this time he was not our broker he will always be there to tell me what I need when it comes to his expertise. This make’s me feel like I am a forever client of his and you can’t go wrong with Wade Betz and team. I move into my new house today and with his words of wisdom I feel like I’m “Winning!” Thank you, Wade and team."

adriana hernandez

"This Team of friendly, knowledgeable and very patient professionals will make your dreams of owning your OWN Home come true I am a Veteran and was so relieved to know that The Wade Betz Team has expertise in dealing with VA loans. And another bonus they worked with me to figure out a financial plan to pay off my debt. And when I moved into my brand new built home that already has 40 K in equity I was debt-free only Mortgage and utilities! I know the homebuying process can be up and down but this team was always available for me to call and ask questions they were all friendly and patient with me even though maybe sometimes I could be over bearing…This is my fourth house I have bought and one of the easiest transactions in the best transactions I have had. I was almost sad when I finally signed at the title company because I felt I was no longer going to call or talk to the Wade Betz team . But they assured me that they were always there for me with anything that I needed and I feel like they have kept their promise. I also would like to add that Wade Betz does a lot for the Veteran community and I so appreciate that. Honestly don’t be afraid to pick up the phone and give this team a call with any question that you have it’s not like there after your money they really genuinely care about people‘s quality of life and getting you the best mortgage for your home. Home ownership is awesome it is your bank account and I believe it is a crime for people to rent. The possibilities are endless for anybody☺️"

melanie wheeler

"We refinanced our house, which normally would be a confusing and bureaucratic process. However, we had a great experience with Wade and his team. They were very responsive answering our questions and they helped us quickly navigate all the requirements. I highly recommend Wade."

chris beauregard

"Wade and his team’s service was second to none. His focus to detail and follow through during the home closing process made our lives much easier. I look forward to working with Wade and team in the future and would recommend his group to anyone looking for a great mortgage broker!"

benjamin lessner

"I appreciate Wade’s team. We went through multiple deals that fell through. His team kept fighting for us. Finally we were able close, even with details in the air up until the ink was on the paper."

paul brawner

"Wade and his team were on top of everything from pre-approval to closing. As a first time home buyer I didn't have to worry about anything and any questions I had were answered promptly."

adrian kotey

"Wade and his incredible Team did it again!!! Wade has been my mortgage broker for years. He has always helped me achieve my financial goals with my best interest at heart. Even with higher interest rates! Thank you Wade!"

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