Looking for a program to remodel a home? Check out Fannie Mae Homestyle mortgage loans.
Minimum Down Payment: As low as 3%
Minimum Credit Score: 620
Maximum Loan Amount: Fannie Mae Maximum
Maximum Debt Ratio: 50%
Homestyle is a program to allow borrowers to buy a fixer upper, remodel it and bundle the payment all in one loan.
Yes, if the home is not inhabitable you can defer payments up to 6 months
We need a 620 score or higher for the Fannie Mae Homestyle program. If you need credit help, check out this post about fixing your credit.
You can get a Homestyle mortgage with a bankruptcy or foreclosure on your credit, but typically we recommend you get a 203k mortgage loan instead since that program is much more lenient in these situations.
We can go up to 50% debt ratio with this program
It depends. If you are under the income limits or are a first time home buyer, we can go as low as 3% down on this program. If you don’t meet these qualifications, it’s 5% down. Investors can also purchase under Homestyle with 25% down. This down payment percentage is based on the purchase price plus the renovations.
No. If you have a Homestyle mortgage loan, you need to hire a contractor to do the work for you.
No. While investors are allowed to get Homestyle financing to renovate single family homes if they have 25% down, the Homestyle mortgage program is designed for long term investors and owner occupants. However, I have fix and flip financing available on a different program.
It is possible to get approved for Homestyle mortgage financing with installment and credit card lates on your credit report.
Fannie Mae has very lenient student loan rules. Income based repayment is acceptable. Click here for more info about buying a home when you have student loans.
When applying for a Fannie Mae mortgage, the file is submitted to Fannie Mae’s approval program called Desktop Underwriter (DU) to make a credit decision. This program takes into account the credit score, the debt ratio and savings (called reserves in the lending industry) to make a yes or no credit decision.
The loan limit is based on Fannie Mae’s limit. You can get renovations for up to 75% of the purchase price. For example, if you were buying a $200,000 home you could get up to $150,000 in renovations on the Homestyle program.
Overlays are additional credit requirements over and above what Fannie Mae requires. Many lenders have overlays but we do not. We do our underwriting at Fannie Mae’s minimum rules.