Homestyle Renovation Loan, Greenville South Carolina.
The Homestyle Renovation Loan is a Fannie Mae product which allows borrowers to make a single close purchase/renovation loan. The renovation can be used for luxury items such as pools, spas etc as long as the improvement adds value and is attached to the original foundation. Improvements are limited to 50% of the appraised value of the finished property.
Unlike the FHA 203k, the Homestyle Loan can be used for the purchase and renovation of secondary and investment properties. The added flexibility of the Homestyle loan makes it a great problem solving tool for sellers, buyers and investors both for refinance or purchase.
I spoke with Brian Johnson, VP of Mortgage Lending, for Guaranteed Rate, about the in and outs of the Homestyle renovation Mortgage in Greenville, South Carolina.
If you have any questions please don't hesitate to contact either myself or Brian.
I'll help with the property and Brian will help with the loan.
How will the Homestyle Loan Help?
SELLER: Homes often sit on the market because they are in need of a little updating, understandably many sellers do not have the cash lying around to make the improvements that will make their home competitive in the market. The home lingers on the market and before long the first question prospective buyers have is, "what's wrong with it?"
Homestyle offers two solutions to the problem of an outdated home:
1) Refinance and handle the renovation yourself. Then burst onto the market with a shiny new kitchen, AC, etc and get it sold quickly! Hell with the Homestyle Loan you could add a tennis court and swimming pool, as long as the improvement adds value and is attached to the original structure you are good to go.
2) Market the home as a clean slate which the buyer can turn into their ideal home. Present the home in conjunction with the Homestyle Loan as an opportunity to get in the right location with equity from day one! We're in Greenville, South Carolina. If you have a home in the North Main or the Augusta area you know that people will pay for the location, give them the opportunity to pay you.
BUYER: You're not the only one who wants to get into the Stone Academy School district! But with the huge increase in home prices in the North Main area, short of winning the lottery, the numbers won't work. What you need is a distressed property but you don't want to live in a construction zone and have to raid your 401k to buy granite. Apply the renovation loan, close on the purchase and renovation same day, and move in to a shiny like-new home.
INVESTOR: Pretty obvious what's attractive here. Why use your money when the bank will finance the upfit. Do more deals from a smaller kitty
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