Chicago Renovation Loan Advice: (866) 384-8151
The Illinois Fannie Mae HomeStyle program is intended for homebuyers who are interested in purchasing a home in need of moderate renovation or simply for homeowners who already own a Fannie Mae-approved home and would like to have it undergo renovations may try and qualify for additional funds through this program.
The HomeStyle loan program through Fannie Mae has many advantages for eligible borrowers, such as:
To find out more information on how to qualify for a Fannie Mae HomeStyle Loan, feel free to give us a call at (866) 384-8151 and one of our Fannie Mae approved mortgage professionals will be willing to answer any questions you may have.
With the HomeStyle Mortgage, the minimum loan amount is $50,000 and the maximum loan amount is in reference to the conforming loan limit ($471,000). Repairs and renovations must be completed within 6 months and cannot exceed 50% of the after improved appraised value.
With the Fannie Mae HomeStyle loan, there are many benefits that a homebuyer can reap such as:
Eligible Fannie Mae Homestyle Properties
The Fannie Mae HomeStyle loan is available for purchase of primary residence, a second home, or investment property.
*Important:Manufactured homes must be newly purchased and never previously attached to a foundation, and must meet all requirements of Fannie Mae HomeStyle.
Down Payment Requirement
Down payment for Fannie Mae’s HomeStyle program is as low as 3% , but is usually 20% required if you choose to not have mortgage insurance.
Loan-to-Value (LTV) Requirement
The LTV required for a HomeStyle loan is up to 95% for primary residences, up to 90% for second home and up to 75% for investment properties.
Debt-to-Income (DTI) Ratio Requirement
Typically, for a Fannie Mae HomeStyle loan, a borrower must not exceed 45% DTI.
Minimum Credit Score
With a LTV greater than 80%, a 700 minimum credit score is required. If the LTV is less than or equal to 80%, a credit score of 680 minimum is required primary residences and second homes.
For investment properties usually borrowers with salaried income must have a minimum credit score of 720 to be considered eligible. Self-employed/commissioned borrowers a minimum credit score of 680 is required.
Please keep in mind that all renovation work must be completed by a licensed contractor, although Fannie Mae does allow for a “Do It Yourself” (DIY) renovation option as long as the buyer receives lender approval for this option and a 10% contingency reserve of the renovation amount is required as well.
A contingency reserve is an amount of money established from a retained earnings to allow for unforeseen losses or damages during the renovation process.