The Fannie Mae HomeStyle Renovation loan works as follows:

1. You apply for the loan through an approved lender.
2. The loan amount includes both the purchase price of the home and the estimated renovation costs.
3. After closing, renovation funds are held in an escrow account.
4. As renovations progress, the contractor submits plans and requests for "draws" from the escrow account.
5. The lender inspects the work and releases funds directly to the contractor.
6. All renovations must be completed within 12 months of loan closing.

This structure ensures that funds are used appropriately and renovations are completed to standard.

The credit score requirements for a Fannie Mae HomeStyle Renovation loan are:

• Minimum credit score of 620
• Debt-to-income ratio should be less than 50%

However, a higher credit score can help you secure better interest rates and loan terms. It's also important to note that individual lenders may have their own, potentially stricter, credit requirements.

For personalized information based on your credit profile, speak with one of our mortgage experts.

The amount you can borrow with a HomeStyle Renovation loan depends on several factors:

• The purchase price of the home
• The estimated cost of renovations
• The after-renovation value of the home
• Fannie Mae's loan limits for your area

Generally, you can borrow up to 75% of the lesser of:

1. The purchase price plus renovation costs, or
2. The after-renovation value of the home

As of 2023, the maximum loan limits for Fannie Mae loans are:

• Up to $726,200 for a single-family home in most areas
• Up to $1,089,300 for a single-family home in high-cost areas

For a personalized estimate based on your situation and location, consult with one of our loan experts.

Yes, you can use a Fannie Mae HomeStyle Renovation loan for an investment property. However, there are some important considerations:

• Higher down payment requirements: Typically 15% for purchases and 25% for refinances
• Stricter qualification criteria: Lenders may have more stringent requirements for credit scores and debt-to-income ratios
• Higher interest rates: Rates for investment properties are usually higher than for primary residences
• Limit on number of financed properties: Fannie Mae typically allows up to 10 financed properties per borrower

It's important to note that the primary purpose of the HomeStyle loan is to improve the property. If you're considering this option for an investment property, be prepared to provide detailed plans for the renovations and how they will increase the property's value.

For more information on using a HomeStyle loan for investment properties, consult with one of our mortgage experts.