HomeStyle® Renovation and Energy Loans
You have powerful products to help more borrowers.
With HomeStyle loans, you can provide funds for a wide range of projects, from simple energy upgrades to whole-house renovations. Plus, as an approved HomeStyle Renovation lender, loans can be delivered to Fannie Mae prior to completion of the renovation work.
Bundle HomeStyle loans for increased savings
Combine HomeStyle Renovation with HomeStyle Energy to get a $500 LLPA credit when borrowers are making energy upgrades along with other improvements to the home.
Review Plans and Prep Loan
- Borrower works with contractor to submit renovation plans to lender.
- Appraiser reviews plans and determines “as-completed” value.
- Lender uses Maximum Mortgage Worksheet (form 1035) to determine mortgage amount.
Manage Funds Through Renovation
- Lender sells loan to Fannie Mae.*
- Lender places funds in a custodial account.
- Contractor begins work and submits requests for funds.
- Lender manages draws based on inspections.
Finalize Loan Completion
- Lender confirms improvements are complete by obtaining a Certification of Completion (Form 1004D) from the appraiser. An appraisal update or "re-appraisal" is not required.
- Title company updates title policy (completion materials).
- Lender finalizes and submits completion materials and certificate of occupancy to Fannie Mae.
- Fannie Mae removes the recourse if loan is sold prior to completion of construction.
*Must be an approved HomeStyle Renovation Lender to sell loan prior to project completion.
- Borrower obtains eligible energy report (if applicable) identifying effective improvements to be made to the home.
- Borrower works with contractor to develop plans and specifications for improvement work recommended.
- Appraiser reviews plans and specifications and determines “as completed” value after improvements are completed.
Manage Funds Through Improvements
- Loan is closed and sold to Fannie Mae.
- Funds for improvement are placed in escrow account.
- Contractor begins work and requests funding. Work must be completed within 180 days from Mortgage Note date.
Finalize Loan Completion
- Contractor completes work.
- Lender confirms work is completed and there is a clear title, and hazard and MI coverages are appropriate.
- Lender provides funding for completed work. Any funds remaining in escrow account must be used to pay down UPB.
- Lender obtains completion certificate (Form 1004D) and keeps in loan file.
Note: Eligible improvements do not have to be complete when mortgage delivered to Fannie Mae. Lender does NOT have recourse for HomeStyle Energy loans.
Want to know more?
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