For the past two plus years Fannie Mae and Freddie have released lending opportunities to help aid, acquire, and improve currently serviced bad mortgage debt. This government sponsored recycling effort has recently given home buyer and investors hope for a better housing demand. While the consensus remains that the mortgable homes need to be in near perfect shape, those who prefer paying less and making improvements themselves are the majority. Now primary resident, second home, and investment properties can be purchased with the improvement costs financed.
The Fannie Mae HomeStyle mortgage provides a convenient way for borrowers to make renovations, repairs, or improvements up to 50% of the completed appraised value of the home. Also, borrowers of all income levels can get up to 90 percent financing. Like the FHA Full 203K loan a certified constant is needed to verify the costs for the scope of work. If the improvement is less than 15k, the consultant services may be waived. Fannie Mae does not specify which improvements a borrower may or may not finance. This means that the improvement funds can be used for "cosmetic" purposes such as carpeting and various kinds of remodeling. There is no minimum amount that needs to be spent on repairs. The improvements should be performed by contractors who are licensed, registered, or certified or have the highest level of certification required.
HomeStyle Mortgage: Benefits
- Qualify for loans based on the as-completed value of the property.
- Improve your home at low first mortgage interest rates.
- Do almost any type of improvements or repairs.
- Finance up to six months of mortgage payments to cover non-occupancy costs during construction.
- Lender involvement in construction oversight and monitoring provides added value to borrowers.
HomeStyle Mortgage: Key facts
- This mortgage is available to owner-occupants, purchasers of second homes and investors.
- Eligible properties are one- to four-unit homes, condominiums, and PUDs.
- Maximum loan amount may not exceed Fannie Mae's conforming loan limits.
- Maximum renovation amount is 50 percent of the as-completed value of the property.
- Qualifying ratios are 28/36.
- Loans are fixed-rate mortgages or rate capped ARMs, fully amortizing with terms between 15 and 30 years.
- A contingency reserve equal to 10 percent of the cost of the renovation is required, and may be financed out of the loan proceeds.
Please contact me to find out if your current or future home may qualify for this program.
Web Site: edubinsky.ahmcloans.com
NMLS # 138324