A HomeStyle Renovation mortgage gives you more flexibility to meet your borrowers’ needs, the potential to increase purchase and refi loan production and save repair-contingent deals.
Help borrowers create their ideal home in neighborhoods they love.
Homeowners are renovating like never before. With a HomeStyle Renovation loan, they’ll have funds for a wide range of renovation projects, from repairs and energy updates to landscaping and luxury upgrades.
Projected amount of remodeling spend by 2025, growing from $221B in 20151
Average growth per year for remodeling spend in major metro areas2
Increase in average amount spent on renovations by first time home buyers in 2016 vs 20153
1, 2 “Demographic Change and the Remodeling Outlook” by the Joint Center for Housing of Harvard University, 2017.
3 U.S. Houzz & Home Renovation Trends Study, 2017.
HomeStyle Renovation Loan Process
Review Plans and Prep Loan
- Borrower works with contractor to submit renovation plans to lender.
- Appraiser reviews plans and determines “as-completed” value.
- Lender uses Maximum Mortgage Worksheet (form 1035) to determine mortgage amount.
Manage Funds Through Renovation
- Lender sells loan to Fannie Mae*.
- Lender places funds in a custodial account.
- Contractor begins work and submits requests for funds.
- Lender manages draws based on inspections.
Finalize Loan Completion
- Lender orders final inspection and re-appraisal.
- Title company updates title policy (completion materials).
- Lender finalizes and submits completion materials and certificate of occupancy to Fannie Mae.
- Lender removes recourse (if sold prior to construction completion) or sells loan to Fannie Mae.
*Must be an approved HomeStyle Renovation Lender to sell loan prior to project completion
Did you Know?
HomeStyle Renovation allows for general Fannie Mae underwriting and eligibility standards.
Major renovations such as additions, multi-room rehabilitations and landscaping are eligible projects, provided they meet the applicable LTV requirements.
- Renovations must be compliant with state and local laws and building codes.
- Renovations must be permanently affixed to the property, but do not have to be connected to the dwelling (such as a garage).
HomeStyle Renovation supports the following property types:
- 1- to 4-unit principal residence
- 1-unit second home
- 1-unit investment property
- New or existing properties
- Manufactured homes
- Condos, co-ops and PUDS
With HomeStyle Renovation funds are available for 75% of the lesser of:
- The sum of the purchase price of the property plus renovation costs, or
- The “as completed” appraised value of the property.
Contractors and subcontractors must be licensed, unless contractor licensing is not applicable under state or local law for the specific trade or type of renovations being performed.
HomeStyle Renovation has been somewhat of a secret weapon for us. —Landy Garcia, AnnieMac
Read Case Study
Want to know more?
Click the Ask Poli widget on the right for answers to all your HomeStyle Renovation questions, all in one place. For the best results, ask your question in a full sentence.
Become an approved HomeStyle Renovation lender
Complete Form 1000A or contact your Fannie Mae customer account team.
Note: Delivering loans post-completion does not require special approval.