What is a Fannie Mae Homestyle® Mortgage?
Homestyle® is a loan program from the Federal National Mortgage Association (FNMA), commonly called Fannie Mae, and allows borrowers to fund home renovation projects. Fannie Mae is a government-sponsored enterprise (GSA), so their loans are conventional ones that are backed by private lenders, not a federal government agency.
With a Homestyle® loan, you can fund so-called “luxury” improvements such as:
This loan is technically capped at 80% of your finished home’s value – different from the home’s current value. This means that if your home is worth $250,000 now, but improvement will bump it up to $300,000, you can borrow up to 80% on $300,000 before the project has even begun.
Renovations with a Fannie Mae Homestyle® Mortgage Loan
Maybe you’ve lived in your home for a few years and want to add some quality upgrades. Or perhaps you’re shopping for homes and see one in a great neighborhood that only needs some improvements. A HomeStyle® loan works for both.
1) For homeowners, the benefits include affordable financing and a wide range of improvement possibilities.
Firstly, funding renovation projects with a HomeStyle® loan generally offers much better interest rates than what you’d get using a credit card. Credit card users can expect rates around 17%, while mortgage rates fall well below that number – saving you money in the long-term.
Secondly, you can fund almost any home improvement project with a HomeStyle® loan. You can use it to renovate single-family homes, four-unit homes, condos and manufactured homes; you can use a HomeStyle® loan to renovate an investment property as well as your primary residence.
2) For homebuyers, a HomeStyle® loan allows you to add some length to your list of possible homes. Imagine finding a home you like in a neighborhood you love. To get the house to that same level, you can combine your purchase loan with a HomeStyle® loan for a single low-cost loan with one set of closing costs.
Before even moving in, you can begin funding upgrades that will transform an overlooked fixer-upper into the home you’ve always wanted.
2) For homebuyers, a HomeStyle® loan allows you to add some length to your list of possible homes. Imagine finding a home you like in a neighborhood you love. To get the house to that same level, you can combine your purchase loan with a HomeStyle® loan for a single low-cost loan with one set of closing costs.
Before even moving in, you can begin funding upgrades that will transform an overlooked fixer-upper into the home you’ve always wanted.
The Right Renovation Solution for You
The right renovation option is the one that fits your unique needs. In general, a Fannie Mae HomeStyle® loan offers great renovation options and highly competitive rates.
As a mortgage professional in one of the nation’s top renovation lenders — CMG Home Loans has been named the top FHA 203(k) lender by HUD for the last four years — I understand how to deliver service that provides the personal touch your unique goals need. Our mission is to provide a Fannie Mae HomeStyle® loan process that simple, easy and affordable.
To reach your homeownership goals, contact me today!