Rediscovering the Fannie Mae HomeStyle Renovation Loan
The Fannie Mae HomeStyle Renovation loan has gotten very little press lately in Texas. I’m not quite sure why since it’s a conventional loan that allows you to purchase or renovation a home with only 5% down. Let’s say you are refinancing and need money for repairs. This loan is your key! It’s the perfect hidden treasure for those needing a mortgage loan with a low down payment and the ability to finance repairs/upgrades.
The great thing about this loan which makes it the choice among homeowners is that it will allow a pool and other luxury items, such as outdoor living spaces, outdoor kitchens, spas, etc., to be financed into the loan.
In many cases the monthly mortgage insurance will be much less than that of its cousin, the FHA 203k rehab loan. With the FHA 203k loan you will pay FHA’s upfront mortgage insurance of 1.75% which is financed over the term of the loan plus the monthly mortgage insurance factor of 1.35%. By design the Fannie Mae HomeStyle Renovation loan requires 5% down (or 5% equity in the case of a refinance) and will only have the monthly mortgage insurance factor…you can avoid mortgage insurance altogether with a down payment of 20%.
Another reason why the Fannie Mae HomeStyle Renovation loan might be the loan that fits what you are looking for is that it allows you to finance up to the conforming loan limit of $417,000. In some states this limit is even higher!
So what renovation items can you add to this loan….well let me lay it on you:
- Structural foundation and or a roof
- Upgrade and renovate kitchen and or bathroom
- Granite counter tops, hard wood floors
- Luxury items and outdoor amenities
I mentioned earlier that this loan allows for a pool but it’s important to reiterate this fact. Unlike the FHA 203k which has also been mentioned the Fannie Mae HomeStyle loan doesn’t have restrictions with regards to pools. FHA considers a pool a luxury item so when it comes to pool repair you are limited to $1200. In some cases this will work but in many this just isn’t enough funds. Especially when you are speaking about adding a new pool. Now if your objective is to remove the pool by filling it in, either loan will be an option.
Being a conventional loan, there are many possibilities. The list above are just some very popular items but we know each person, home and loan are different…call me to hear all the ins and outs of what can be done. We will customize this loan to meet your specific needs!
And remember repairs don’t scare me and they shouldn’t scare you either!! Let’s rediscover the Fannie Mae HomeStyle Renovation loan together.