HomeStyle® Renovation Mortgage

                                                                                                                                                                                               August 2014


The HomeStyle Renovation (HSR) mortgage provides a convenient and economical way for borrowers considering moderate home improvements to make repairs and renovations with a single-close first mortgage, rather than a second mortgage, home equity line of credit, or other, more costly methods of financing.

Lender approval is required to deliver HomeStyle Renovation loans to Fannie Mae. You must have two years of direct experience originating and servicing renovation mortgages within the last five years, and meet certain financial capacity and operational requirements. See Selling Guide B5-3.2-01: HomeStyle Renovation Mortgage: Lender Eligibility for details, and contact your Fannie Mae customer account team for assistance. Product Overview The HomeStyle Renovation is a single-close loan that enables borrowers to purchase a home that needs repairs, or refinance the mortgage on their existing home and include the necessary funds for renovation in the loan balance. The loan amount is based on the “as-completed” value of the home rather than the present value.

Loan Purpose Purchase or limited cash-out refinance. Loan Type/Term 15- and 30-year FRMs and all eligible ARM products.


Property and Renovation Eligibility

One- to four-unit principal residences, one-unit second homes, or one-unit investor properties including units in condos, co- ops, and PUDs. No manufactured housing. Any type of renovation or repair is eligible, as long as it is permanently affixed to the property and adds value. Renovations should be completed within a twelve-month period from the date the mortgage loan is delivered.


Borrower Eligibility

Eligible borrowers include individual home buyers, investors, nonprofit organizations, or local government agencies. Nonprofit organizations must provide additional documentation so that lenders can assess the viability of the nonprofit to repay the particular mortgage. Underwriting Desktop Underwriter® (DU®) and manual underwriting permitted. DU Approve/Eligible recommendations only. Purchase Money Mortgages – Maximum Loan Amount

For purchase transactions, loan to value ratio is based on the lesser of:

1) purchase price and cost of renovation, or 

2) the “As-Completed” value. Lenders should use the HomeStyle Renovation Maximum Mortgage Worksheet (Form 1035) to calculate the maximum mortgage amount.



This summary is intended for reference only. All criteria are subject to the formal terms and conditions of the Fannie Mae Selling Guide and Servicing Guide. In the event of any conflict with this document, the Selling Guide and/or Servicing Guide will govern.

© 2014 Fannie Mae. Trademarks of Fannie Mae. August 2014