That fixer-upper could be your dream home

Boost your buying power with a HomeStyle Renovation Loan

Stacy Morse is a Mortgage Loan Representative at the Peoples Bank Everett Real Estate Loan Center.

Stacy Morse is a Mortgage Loan Representative at the Peoples Bank Everett Real Estate Loan Center.

In today’s tight real estate market, limited inventory means finding the ideal home for your budget can be tough. But what if you could create the home you want?

If you find a house in a location you love, updating an outdated interior or creating a little more space can quickly transform that “house” into your home. And thanks to the forward-looking option of a Fannie Mae HomeStyle Renovation Loan, financing that transformation can be simple.

Unlike a HELOC, or home equity line of credit, which lets existing homeowners take advantage of the equity in their home to finance a renovation project or other major purchase, approval of a HomeStyle Renovation Loan looks forward to the value you’ll create with your renovation.

The program lets you buy a home or refinance an existing home and include funds for improvement or repairs in the new loan amount, providing a simple, flexible, and affordable way for borrowers to make renovations, repairs, or improvements.

Essentially, the loan considers the completed value that projects like a new kitchen, second bathroom, or additional bedroom will add to the home, providing up to 75 percent of the completed value. Even smaller projects are an option, such as new flooring, gutters, or a new, efficient furnace. The possibilities are practically endless for how this type of loan can be used. It’s your opportunity to be inspired by a fixer-upper, not be afraid of it.

Loan details:

  • Maximum loan amount of $647,200 (may be higher in some counties); for projects above $25,000, a renovation contractor must be involved.
  • Typically, projects must be completed within three, six, or nine months.
  • May be used for a primary, second home, or investment property.
  • Multiple types of repairs or improvements are allowed.
  • Up to 97 percent loan to value for primary purchase scenarios.
  • Upfront draws allow up to 50 percent of material costs.
  • Manufactured home improvements allowed under certain criteria (renovations capped at a lesser of $50,000 or 50 percent of the as-completed value).

HomeStyle Renovation funds are included in the amortized home financing or refinancing package. While rates are rising, they are still reasonably low. Considering how the right renovations can add considerable value to your home while allowing you to build equity, it is a great time to consider this option.

Stacy Morse is a Mortgage Loan Representative at the Peoples Bank Everett Real Estate Loan Center. To learn more about HomeStyle Renovation Loans and other home loan options, please visit and speak with a local lender.

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