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
