In the past, the only way you could get renovation money was with an FHA (Federal Housing Authority) loan, and you had to be an owner occupant. But that is all changed now with the announcement of the new HomeStyle Renovation Program being offered by Fannie Mae (Federal National Mortgage Association). The new loans are available to owner occupants as well as investors, government institutions and non-profits, which opens up an entirely new facet to real estate investing. You can use the HomeStyle Loan to make a new purchase or you can even re-finance your current home to make improvements that increase the value of your property.
Renovation/repair costs up to 50% of the “After Completed” Value of the property are allowed, and there is no minimum dollar amount for repairs. Even luxury items such as pools, spas, etc, are included on this new way to finance home improvements. Any item that adds value to your property and is permanently affixed to the property is allowed.
There are many programs available with terms differing for owner and investors, and in all cases a licensed contractor that is approved for the program must be used.
For more information, please visit Fannie Mae’s website: