What is a renovation home loan?
If you can’t find the perfect Rhode Island home, you can create it with a renovation home mortgage! With housing supply inventory at an all-time low and existing home prices rising, homeowners have been renovating like never before. A Fannie Mae HomeStyle Renovation mortgage can get you into a house you can make into your dream home with one conventional first mortgage.
The Fannie Mae HomeStyle Renovation mortgage is a simple way for borrowers to make renovations and repairs to a home that might be less than perfect but perfect for them! Borrowers can obtain funds in addition to the cost of the mortgage with standard pricing. The funds can be used on many renovation projects and to address repair contingencies as well.
Fannie Mae HomeStyle Renovation mortgages are designed to purchase or refinance a home. HomeStyle loans allow borrowers to take the completed value of the project when determining the total loan amount, up to 75% of either the purchase price plus renovation costs or the “as completed” appraised value, whichever is lower. With standard pricing and conventional execution, loan funds can be delivered before the project starts.
Top 6 Reasons to Consider a Fannie Mae HomeStyle Renovation Mortgage:
- Cost-effective way to renovate or repair a home at the time of purchase or later.
- Funds to renovate are provided by one mortgage rather than a second mortgage, home equity line of credit, or other more costly financing methods.
- The Loan to Value (LTV) is calculated by considering the proposed project, giving borrowers more flexibility.
- Loan funds can be delivered before the project starts.
- Use for any renovation project, including updating a bathroom, adding a mudroom, landscaping, or replacing a roof up to 97% LTV or 10% CLTV (Combined loan-to-value is the ratio of all loans on a property to the property’s value) when paired with Community Seconds financing.
- The home does not need to be habitable at the time of closing.
The Fannie Mae Homestyle loan program is available for both purchases and refinances. Fannie Mae must approve lenders to offer this product. Mortgage Equity Partners had to undergo a rigorous application process to be authorized to offer HomeStyle Renovations Loans, demonstrating strong operational controls and proven experience in the renovation market.
How do I qualify for a renovation home loan?
Qualifying for a renovation loan is like qualifying for a traditional loan. Borrowers must have a good credit score, stable income, and a low debt-to-income ratio (DTI). Additionally, borrowers must provide a detailed renovation plan and cost estimates for the repairs or improvements they plan to make on their Rhode Island home.
Fannie Mae Homestyle Renovation loans offer a practical solution for borrowers who want to purchase a home that needs repairs or fund renovations to improve their existing home. Renovation loans can provide a more flexible way to achieve homeownership or desired renovation goals. By understanding the different types of renovation loans available and their benefits, you can decide whether a renovation loan is right for you. Working with a renovation professional is essential to get the best outcome. Contact a member of our loan team today to learn more about this fantastic loan option.
