While renovating a home can seem tiresome and time consuming, the loan process shouldn’t be! When you use Fannie Mae’s HomeStyle Renovation Loan, you are using a product that will be closed in three simple phases.
Phase One: Review Plans and Loan Preparation
- Reviewing homestyle loan terms and fees.
- Borrower works with contractor and in most cases a HUD consultant to submit renovation plans to lender.
- Appraiser reviews plans and determines “as-compared” value.
- Lender uses Maximum Mortgage Worksheet (form 1035) to determine mortgage amount.
Phase Two: Manage Funds Through Renovation
- Lender sells loan to Fannie Mae*.
- *Must be an approved HomeStyle Renovation Lender to sell loan prior to project completion.
- Lender places funds in a custodial account.
- Contractor begins work and submits requests for funds.
- Lender manages draws based on inspections.
Phase Three: Finalize Loan Completion
- Lender orders final inspection.
- Title company updates title policy (completion materials).
- Lender finalizes and submits completion materials and certificate of occupancy to Fannie Mae.
- Lender removes recourse (if sold prior to construction completion) or sells loan to Fannie Mae.
Read our blog to learn more about Fannie Mae’s HomeStyle Renovation Loan on our website. If you have any questions, then reach out to a team member today!