Sometimes a house needs major renovations in order to become your dream home. When that happens, the Fannie Mae HomeStyle loan can be a viable option for getting the funding that you need to make those renovations happen. However, before you commit to a loan, you should research as much as you can about the loan program. In light of that, I’ve brought you a guide to the Fannie Mae HomeStyle loan. Read it over to get a sense of whether or not this loan program is right for you.
What is the Fannie Mae HomeStyle loan?
The Fannie Mae HomeStyle loan is a conventional loan that is aimed at making renovations to an existing property easier for buyers. Rather than having to take out one loan to purchase your new home and then another loam 1oan to cover the cost of renovations, the HomeStyle loan allows you to roll both costs into one. By combining these costs, you’ll be able to save on interest payments and closing costs.
How the loan works
The HomeStyle loan is unique in that, rather than being based off the current value of the home like most other mortgages, it allows buyers to borrow against the “after repaired value” (ARV) of the home, which estimates what the home will be worth once all the renovations have been completed. They can borrow up to 105%…