The Fannie Mae Homestyle streamline product enables homebuyers to finance the costs of renovations through a single mortgage. The program does not allow any structural related items in the scope of work being performed, but does allow landscaping and site amenities. The loan is fully disbursed at closing, all renovation funds are placed into escrow and the borrower is required to make the full PITI payment throughout renovations. “Self Help” is not permitted with this program.
Maximum rehabilitation amount (including contingency and fees) is 50% of the “as completed” value.
Primary residence, second homes and 1 unit investment properties. (3-4 family O/O properties must be self sufficient).
Condo’s and PUD’s must be FNMA eligible (for condo’s, unit interior rehab only).
2-4 unit investment and Cooperatives
Multi-Family conversions for increase/decrease in unit count
Mixed use properties
New construction-Must have Certificate of Occupancy for a minimum of one year
Partially completed projects
Mortgage insurance is required for all loans with less than 20% down payment.
MI is based on the lesser of “as completed” value or acquisition cost (purchase price + total rehab)
Non-Occupant Co-borrower is allowed. The owner occupant borrower must make the first 5% of the down payment from his/her own funds.
Condominiums and PUDs have to be verified as to meeting Fannie Mae’s project eligibility criteria. Verification of
adequate hazard, flood, liability and fidelity insurance coverage is required.
Note: It is important that all household members are identified as part of the loan application.
Minimum 620 FICO score (with approve/eligible findings). Higher FICO requirements for multi’s with MI.
Single family investment properties cannot use rental income to qualify.
Automated Underwritingis require; must have Fannie Mae DU Approve/Eligible findings
No Bankruptcy in the past 4 years.
If there was a foreclosure, deed-in-lieu, pre-foreclosure or short sale in the past 7 years then financing available for
primary residences only with a minimum of 10% down
No 30 days lates on rent or mortgage in last 12 months.
If subject is second home or investment, max number of financed properties limited to four.
All files require a pre-funding underwriting review by a third party vendor prior to closing.
Additional prior to closing conditions from this pre-funding review may apply.
Please allow a minimum of 4-5 days in the process to accommodate this requirement, and 48 hours for followup conditions to be reviewed.
Primary Residence 2-4 unit – 6 months (mortgage payment) reserves must be verified (needs to show this money in the bank after closing)
Second Homes – 2 months reserves
Investment 1 Unit – 6 months reserves
15% required if utilities are not on, subject is vacant or if deemed necessary based on the scope of work.
Unused funds must be applied to principal reduction
Primary Residences and Second Homes:
If 5% down then seller can pay up to 3% of the sales price toward closing
If 10% down then seller can pay up to 6% of the sales price toward closing
Investment Properties: seller can pay up to 2% of the sales price toward closing
All seller contributions must be negotiated and be included in the sales agreement
The property must be insured for wind damage. If the base hazard insurance policy excludes wind coverage, an endorsement or separate policy evidencing wind coverage must be obtained.
A conventional appraisal must be obtained and cannot be ordered until we have both the sales agreement and contractor’s proposal.
Appraisal to be completed subject to the repairs/renovations as per quotes provided.
Repair/replace roofs, gutters and downspouts
Repair/replace/upgrade of existing HVAC systems
Repair/replace/upgrade of plumbing and electrical systems
Repair/replace existing flooring
Minor remodeling, such as, kitchens, which does not involve structural repairs
Exterior and interior painting
Weatherization: including storm windows and doors, insulation, weather stripping, etc.
Purchase and installation of built-in appliances only. No free-standing appliances including ranges, refrigerators, washers, dryers, dishwashers and microwaves
Improvements for accessibility for person with disabilities
Lead based paint stabilization or abatement of lead based paint hazards
Repair/replace exterior decks, patios, porches
Basement refinishing and remodeling, which does not involve structural repairs
Window and door replacements (same sizes) and exterior wall re-siding
Septic system and or well repair or replacement
Landscaping and site amenities allowed as long as they are permanently affixed to property and add value.
No barns, sheds, storage or other out building
Detached garages are permitted when they are the only garage on the property.
FNMA Homestyle Maximum Mortgage Worksheet
Contractor Credit Authorization
FNMA Contractor Profile
FNMA Homestyle Contractor’s Resume
FNMA Homestyle Homeowner/Contractor Agreement
Rehabilitation Loan Permit Certification
Copies of all permits (if applicable)
FNMA Homestyle Borrower’s Acknowledgement
FNMA Homestyle Renovation Consumer Tips
All work performed must be completed by a qualified contractor(s)
No more than 3 contractors allowed or a general contractor is required
Borrower may not act as a general contractor as “self help” is not permitted
A contractor acceptance checklist will be performed by MMC underwriters on all contractors
Contractor License (including all subs)
Contractor general liability insurance with minimum of $500,000 coverage.
Rehab Period: Work must begin within 30 days of closing and be completed within 6 months of closing.
No disbursements at closing
Appraiser inspects property and identifies the percentage of work completed to establish amount released
No disbursements without an appraiser’s inspection
Maximum of 2 disbursements per contractor, 3 contractors maximum
10% hold back on each disbursement
Loan Servicer handles all contractor disbursements
2 Appraiser Inspection fees max: $150 per inspection
2 Title updates are required: 50% and 100% completion at $125 each
Draw administration Fee of is $500 required
All Contractor proposals must be pre-approved by Renovation Loan Coordinator
Final contractor(s) proposals must be included in appraisal report.
Minimum Down Payment and Credit Scores:
1 Unit Property: 5% down and 620 score
2 Unit Property: 15% down and 660 score
3-4 Unity Property: 25% down and 680 score
1 Unit Property Only: 10% down and 620 score
1 Unit Property Only: 15% down and 620 score
* 1 Unit investment refinances are limited to 75% LTV/CLTV
Down Payment Calculations:
Purchases: Use the lesser of “As completed value” or Acquisition cost (Purchase price + rehab costs + Contingency reserves) X required down payment
Limited Cash-out Refinances: Loan amount divided by the “As Completed Value” determines the “Loan to Value”