- By Hugh Wolf
- In Uncategorized
Financing your Home Performance Renovation Projects
Financing your Home Performance Renovation Projects with the Home Style Renovation loan. This financing product is a less expensive construction loan than the FHA 203k? If you’re planning a building renovation there’s many financing vehicles that you’re most likely exploring rather than paying cash.
The Home Style Renovation loan is Fannie Mae’s quick and simple construction loan with a “one time close” process that’s an economical way to help you get the repairs and upgrades you need to make your home more comfortable, safe and efficient. There is no second mortgage, equity line of credit involved and no occupancy requirements. You can use this product for your primary, secondary and investment properties. The loan highlights are that you can finance your home and your improvements with a single “one time close” construction loan.
In addition, almost any type of renovation improvement or repair is eligible as long as it adds value and is permanently fixed to the property. Eligible home renovation projects or repairs include remodeling of a kitchen or bathroom; installation and upgrading of landscaping; and replacement of home appliances, including luxury items like swimming pools for example.
When applying for a Home Style Renovation loan you will provide your lender with a scope of work listing all the items and cost to your project .The lender will then order an appraisal that will value your home based on “future value” with the new improvements from your scope of work in order to finance your new projects. All work must be completed within 12 months and if you’re a seller you can add seller concessions to the loan to help out a new buyer purchasing your property.
What are the Home Style Renovation minimum requirements? The Home Style Renovation Loan is available via any Fannie Mae-approved mortgage lender, which means that you can get a Home Style loan just about anywhere.
However, you’ll want to be sure that you meet the program’s minimum standards. Fannie Mae’s guidelines specify that mortgage borrowers must show a minimum credit score of 620 in order to be approved for a Home Style Renovation loan. However, this minimum requirement applies only to loans for primary residences. For borrowers using Home Style Renovation on a second home or investment property, the minimum credit score required is 700. You will also want to make sure you meet minimum down payment requirements. For borrowers with good credit, the Home Style Renovation allows a down payment of just 5% percent, which is just short of the FHA 203k’s minimum down payment requirement of 3.5% percent. However, this applies to 1-unit homes only.
Homes with 2-units require a 15% down payment in order to use Home Style Renovation Loan; and 3-4 unit homes require a down payment of 25 percent. Down payment minimums for second homes and investment properties are slightly higher. If you want to find out more about this program contact Eco Kong for a Whole House Energy Assessment and we will prepare a scope of work based on our finding and guide you through the Home Style renovation process to meet your need in comfort, safety and efficiency.