HomeStyle Eligible Properties

HomeStyle Eligible Properties

What Types Of Properties Are Eligible For HomeStyle Renovation Financing?

HomeStyle Renovation Mortgages are eligible on these property types:

• one- to four-unit principal residence

• one-two unit second home, or

• one-four unit investment property.

The security property for a HomeStyle Renovation Mortgage may be a unit in an eligible PUD, condo, or co-op project. Manufactured homes are not permitted.

Mixed Use Properties Are Eligible For A HomeStyle Mortgage

A HomeStyle mortgage may be originated on a “mixed use” residential property provided:

  • The property must be a one-unit dwelling that the borrower occupies as a principal residence (see the FHA 203k mixed-use property description for more details on multi-level mixed use properties).
  • The borrower must be both the owner and operator of the business.
  • Appraisers provide an adequate description of the mixed-use characteristics of the subject property.
  • The mixed use of the property represents a legal, permissible use of the property under the local zoning requirements.
  • The market value of the property is primarily a function of its residential characteristics, rather than of the business use or any special business-use modifications that were made.

Number of Financed Properties Allowed

When the HomeStyle Renovation Mortgage is secured by a second home or an investment property, Fannie Mae limits the number of residential properties the borrower may currently be financing to four properties, including his or her principal residence.

This limitation is based on the total number of properties financed, not just the number of mortgages sold to Fannie Mae or the number of HomeStyle mortgages sold.

Joint ownership in residential real estate is considered the same as total ownership of an individual property. The four-property limit applies to any combination of ownership in one- to four-unit properties, whether or not the financing involves a HomeStyle product.

For example, a borrower may own four single-family properties; two two-family properties and two single-family properties; one co-borrower may own one single-family property and the other co-borrower may own three two-family properties; a borrower may own four four-family properties.

Condo’s and Co-op’s

When the security property is a unit in a condo or co-op project, the project must be one for which the proposed renovation work is permissible under the bylaws of the homeowners’ association or co-op corporation or one for which the homeowners’ association or co-op corporation has given written approval for the renovation work.

The HomeStyle renovation work for a condo or co-op unit must be limited to the interior of the unit, including the installation of fire walls in the attic.

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