What is a Fannie Mae HomeStyle Renovation Mortgage?

What is a Fannie Mae HomeStyle Renovation Mortgage?

A Fannie Mae HomeStyle Renovation Mortgage is a type of conventional loan offered by Fannie Mae that allows borrowers to either purchase a property or refinance an existing mortgage and include the cost of renovations, repairs, or improvements into the single loan amount. This financing option is particularly useful because it consolidates all costs into one loan with a competitive interest rate, and it is secured by the property being renovated.

The HomeStyle Renovation loan covers a wide range of renovation projects, from structural alterations and reconstruction to landscaping and luxury improvements. It can be applied to various types of properties, including single-family homes, second homes, and investment properties, making it flexible for different uses. The renovation work must be completed by a licensed contractor, and the work must be started within 30 days of closing and completed within 12 months.

This loan program is beneficial for buyers who want to purchase a home that needs renovation or for homeowners who wish to upgrade their existing home and finance the renovation costs at a potentially lower interest rate than with credit cards or personal loans.