Fannie Mae Home Improvement Financing Options for Maximum Solutions:Homestyle Renovation

Spring 2014

What’s the Options?

• Available for owner-occupied, 2nd home and investor

• Owner-occupied: 1 to 4 unit, 2nd home/investor: 1 unit

• Owner-occupied LTV: 1 unit=95%, 2 units=85%, 3 to 4 units=75%; 2nd home LTV = 90% ; Investor LTV = 80%

• Standard Conventional Guidelines

• Appraisal always based on After-Improved Value

• LTV based on lower of Acquisition Cost or After-Improved Value

• Acquisition Cost = sales price + total renovation cost

• All repairs completed after loan CLOSES

What’s the Options?

• One general contractor plus one “specialty” contractor

• Contractors must be licensed and insured with the state/county where property is located

• Contractor can be a relative of the borrower

• Work order itemizes both material and labor

• Luxury items, such as in ground pools and outdoor living areas, are acceptable

• Typical loan closes within 45 days of contract– 25 days from receipt of signed contractor bid

– Tip: use a consultant feasibility study to close your loan quicker

Example of Eligible Repairs

• Roofs, gutters, down spouts• Heating / cooling systems• Plumbing / electrical systems• Carpet and flooring• Kitchen and bathrooms• Windows and door replacements• Painting and siding• Basement remodeling• Mold, lead paint abatement, and water damage• Room additions and garage• Well and septic systems• Pools and outdoor living space

What’s the Difference ?

• Homestyle

– Available for purchase and refinance

– Maximum total renovation cost is 50% of After-Improved Value

– Large sales prices and large improvement projects

– Condos MUST be FNMA warrantable

– Standard conventional MI when LTV is above 80%

Reason for Options

• Easy to understand conventional FNMA guidelines• Listing agents can increase the # of showings and

net proceeds• Buyer agents can focus on homes in perfect location

even when home is less than perfect in current condition

• Home buyer gets a competitive conventional 30-year loan plus personalized improvements with added comfort and enjoyment

• More satisfied customers = more referral business

Contact

This is a business-to-business communication provided for use by mortgage professionals only and is not intended for distribution to consumers or other third parties. It is not an advertisement; as such term is defined in Section 226.24 of Regulation Z. HomeBridge Financial Services, Inc. Corporate NMLS #6521, AL Consumer Credit License 21077; AZ Mortgage Banker License 922458; Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act. 4130749  CO Mortgage Company Registration, Regulated by the Division of Real Estate; CT Mortgage Lender License 10642; DE Chapter 22 Licensed Lender 11772; DC Mortgage Dual Authority License MLB6521; FL Mortgage Lender License ML100000179; GA Mortgage Lender License 22495; IL Residential Mortgage License MB.6760732; IN-DFI First Lien Mortgage Lending License 15700; IA Mortgage Banker License 2006-0328; KS Mortgage Company License MC.0025113; KY Mortgage Company License MC76089; LA Residential Mortgage Lending License; ME Supervised Lender License SLM11915; MD Mortgage Lender License 12402; MI 1st Mortgage Broker/Lender/Servicer Registrant #FR0017790; MN Residential Mortgage Originator License MN-MO-6521; MS Mortgage Lender License 6521; MO Residential Mortgage Loan Broker License 10-1956-A; NH Mortgage Banker License 16429-MB; NJ Residential Mortgage Lender License 9200151; NM Mortgage Loan Company License 2315; Licensed Mortgage Banker (B500691) – NYSDFS; NC Mortgage Lender License L-121619; OH Mortgage Broker Act Mortgage Banker Exemption MBMB.850046.000; OK Mortgage Broker License MB001985; OR Mortgage Lending License ML-3566; PA Mortgage Lender License 20394; RI Lenders License 20112804LL; SC-BFI Mortgage Lender/Servicer License MLS–6521; TN Mortgage License 3010; TX–SML Mortgage Banker Registration; VT Lender License 6093 MB; Licensed by the VA State Corporation Commission # MC3046; WA Consumer Loan Company License CL-6521; WV Mortgage Lender License ML-23522; WI Mortgage Banker License 38349BA. Information is subject to change without notice.

Ron Bolton NMLS # 184046Destin Florida Branch

495 Grand Blvd Suite 206Miramar Beach, Florida 32550

Cell: 251-721-5626rbolton@homebridge.com - www.HomeBridge.com/ronbolton