Michigan HomeStyle Renovation Loan.

What is the Homestyle Renovation Mortgage Loan?

The Fannie Mae Homestyle Renovation loan program is gaining popularity among homebuyers. Also known as the “conventional rehab loan”, this mortgage program allows for a minimal out-of-pocket investment into a property. It allows the homebuyer to finance repair costs, appliances and other home improvements into their mortgage with one low monthly payment.

Logistically speaking, a homebuyer, after agreeing to purchase a home for a set price, attains quotes from contractors to have renovations done. An appraisal of the home is then done, taking into account the home’s value once renovations have been completed. You can then borrow up to 95% of that appraised value. As soon as closing takes place, funds for renovations are placed in an interest-bearing escrow account and construction begins. Once renovations are complete, a final inspection takes place, the contractors are paid out of the escrow, and you move in to your beautifully renovated new home!

For more information on FHA 203k Mortgage Loan programs from Riverbank, call us at 800-555-2098 or apply online today!

Homestyle Renovation Loan Application

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Why choose the Homestyle Renovation Mortgage Loan?

Many banks will simply deny a loan if the subject property is not in livable condition, but that is not the case with the Homestyle Renovation loan program. Do not walk away from your potential dream home over fear of renovations and a little extra paperwork. The Homestyle Renovation mortgage loan program allows you to finance up to 50% of the completed value of the home. There are no required improvements or a minimum dollar amount for the repairs.

Homestyle Renovation vs FHA 203(k) Loans

The two most well-known renovation loan programs are the FHA 203(k) and Homestyle Renovation programs. 203(k) is an FHA program, while Homestyle Renovation is a Conventional program. Each renovation loan, therefore, must follow the requirements and guidelines of its parent program.

Some of the standout benefits of the Homestyle Renovation program include a low 5% down payment, no private mortgage insurance (PMI) with 20% down payment (or will eventually drop off after 20% equity), can be used to purchase a second home or investment property, and can include any repair as long as it is attached to the property and increases the overall value of the property.

Eligible Homestyle Renovation Home Repairs

The homebuyer can use the Homestyle Renovation program to finance repairs of anything from painting, to deck replacement, to room additions. Improvements and upgrades can be made, even if the home does not necessarily need them to be livable. All health, safety and energy conservation items must be addressed first, prior to completing general home improvements and upgrades. See below for an example list of upgrades homebuyers have made using the Homestyle Renovation mortgage loan program:

  • Structural alterations and additions (with upfront approval)
  • Upgrade central air/heat, and electrical systems
  • Repair termite or moisture damage
  • Remodeled kitchen and baths, modernize plumbing
  • Install or repair well or septic systems
  • Repair or Replace roofing, gutters, downspouts
  • Flooring, tiling and carpeting
  • Energy conservation improvements
  • Major landscaping projects
  • Improvements for disability accessibility
  • Replace built-in appliances (no freestanding appliances)
  • Foundation repairs
  • Addition of luxury items, such as a swimming pool
  • Other improvements that are a PERMANENT part of the real estate*

Homestyle Renovation Mortgage Loan Requirements

  • Minimum credit score of 620
  • Minimum 5% down payment
  • Property must meet eligibility requirements
  • Borrower must meet all other Conventional program requirements

Property Types Eligible for the Homestyle Renovation Mortgage Loan

To be eligible, the subject property must be a 1-2 unit primary residence or a single family second or investment home. The number of units on the site must be acceptable according to the provisions of local zoning requirements. All newly constructed units must be attached to the existing dwelling. Cooperative units are not eligible.

In addition to typical home rehabilitation projects, this program can be used to convert a single family dwelling to a multi-unit dwelling. Alternatively, an existing multi-unit dwelling could be converted to a single family home. See below for a full list of eligible property types:

  • 1-2 Unit Primary Residences
  • Single Unit Second Home
  • Single Unit Investment Property
  • FNMA Approved Condominiums
  • PUD's and Site Condominiums
  • REO, Short Sale, Foreclosure Properties

How can I use the Homestyle Renovation Mortgage Loan?

The Homestyle Renovation loan is a unique mortgage option that can be used for both home purchases and refinances. Whether you are looking to purchase your next home or to renovate your current home, this may be the right loan program for you. Homestyle Renovation mortgage loan uses include:

  • To purchase a dwelling and the land on which the dwelling is located and rehabilitate it.
  • To refinance existing liens secured against the subject property and rehabilitate it.

Homestyle Renovation Mortgage Loan Rates

Mortgage rates are very competitive for this loan program. To get an exact rate quote for your situation, speak with a Riverbank Finance loan officer. Conventional mortgage rates are very credit driven, so the higher your credit score, the lower the mortgage rate you will receive. If you have a good credit score and are interested in purchasing a “fixer upper”, the Homestyle Renovation mortgage loan program would be a great solution for you and your mortgage needs.

For more information, visit our Conventional Mortgage Calculator.

Apply for the Homestyle Renovation Mortgage Loan

To apply for a Homestyle Renovation Mortgage Loan the first step is to request information below or speak with a Mortgage Loan officer at 800-555-2098.