Fannie Mae Homestyle Renovation Loans for Homeowners & Investors

Real Estate Agent with BHHS Fox & Roach Realtors - Newtown RS295531

The Fannie Mae Homestyle Renovation Loan is a great option in today’s market where inventory is limited.  It opens up a wider range of homes to buyers if they are willing to live through the renovations.  While that isn’t necessarily easy you could end up in the neighborhood you want with a home you’ve personally renovated to your tastes which can be hard to come by.


Turn A Shack

Into Your Castle!!!


Overview Conventional Loan with a minimum 5% Down Payment Maximum Loan Amount $424,100 Maximum Renovation Cost is 50% of the future value after renovations.  This added to the purchase cost to establish the mortgage amount. Interest rates are slightly higher by approximately .375 - .5% No prepayment penalty


Some Examples of Projects Allowed

Kitchen Remodel

Bathroom Remodel

Painting Roof

Replacement Windows

Add Central Air

Hardwood Floors

Patios & Decks

Siding & Stucco Replacement

Finishing a Basement

Putting on an Addition Garage Doors

Energy Conservation

Add a Pool




Who Is Eligible?  

Owner Occupied: 1 unit can finance 95% of sales price & repair costs.

With a 5% down payment a 3% seller assist is allowed. 

With a 10% + down payment a 6% seller assist is allowed.


Owner Occupied: 2 – 4 unit option available Investor & 2nd Home options

Available Investors: Only available to renovate & hold & not for flippers. 

Can finance up to 85% of sales price & repair costs.

A 2% Seller Assist is allowed.  


How It Works

Appraised as if repairs are already done 60 – 90 days to settlement Assigned HUD Consultant reviews property & establishes costs to renovate.  There is an additional 10 – 20% built in reserve for surprises.  This amount is put into an escrow account.  Work can only begin after settlement.  Can only use 1 contractor and they cannot be related to you & you can’t work for them.  Contractor must be licensed & insured & must have references.  As the contractor completes work the consultant will come out to inspect up to 5 times during the project & pay the contractor from the escrow account.  If the cost is less than the original estimate or the 10 – 20% in reserves were not needed that money pays down the loan amount.  Project must be completed in full within 6 months. This is a great option for homebuyers, but could also help a seller who has run into problems with their septic system, stucco, roof, or for an estate sale where the home has not been updated in many years.  These loans can be advertised to potential buyers and will widen the range of buyers who can purchase the home since they won’t need to worry about spending a large amount of money after settlement on updates & renovations.   If you would like to learn more about this loan & see what homes you could purchase using something like this give my team a call.

Dale Cosack #215-860-4067 or

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