Loan-to-value (LTV) limits and eligible property
The max LTV for Fannie HomeStyle will depend on the property type:
97% for a one-unit, principal residence with a fixed-rate mortgage.
85% for two-unit principal residences.
75% for three- and four-unit principal residences.
90% for one-unit second homes.
85% for one-unit investment
Credit and Income qualifications
- minimum credit score of 620 and max debt to income ratio of 50.000.
- the contractor will need to sign a “construction contract” and will need to be approved by the lender.
- All plans and specifications “must be prepared by a registered, licensed or certified general contractor, renovation consultant, or architect.”
- HomeStyle mortgage requires a contingency reserve of 10% to 15%
- A project inspector is required if the project exceeds $50,000 or includes structural repairs.
- If the property is not habitable at the time of closing, Fannie allows the borrower to finance up to six months of mortgage payments (principal, interest, tax, and insurance)