Product Overview

To be used on Conventional loans for either required or optional repairs.

  • Repairs MUST be permanently attached to the property and add value.
  • May not be structural - exceptions are roofing and minor foundation repairs
  • MOBILE/MANUFACTURED HOMES are now allowed with restrictions & Maximum repairs are limited to the lessor of $35k or 10% of appraised value + financed renovation fee's

Primary Homes

-1-4 Units

-620 FICO Minimum (660 High Balance)

-95% LTV 1 Unit

-80% LTV 2 Unit

-75% LTV 3-4 Unit

Second Homes and Investment Properties (MINIMUM LOAN AMOUNT- $30K)

-620 FICO Minimum (660 High Balance on Second Home only)

-1 Unit - 80% LTV Purchase Only (75% LTV Refinance)

-2-4 Unit Investment Properties now eligible (75% LTV purchase/refinance). Standard Conforming Loan amounts only, NO High Balance.

- Second Homes and Investment Properties are limited to 4 financed properties (Including Primary Residence) No Limit for Primary Residence.

- No Cash Out Allowed.

Reserve Requirements

  • Second home - minimum of 2 months
  • Primary and investment property - 2-4 unit properties require a minimum of 6 months reserves

Allowable Repairs or Renovations

  • Repairs/improvements must be permanently attached to property and add value
  • Cosmetic repairs only
    • "Built-in" kitchen appliances

Conversions:

-Conversion of 2-unit to 1-units

-Conversion of 1-unit to 2-unit by exception only. Borrower must have prior landlord experience or qualify without rental income

Renovation Cost Limits

  • Up to $35,000 in repairs/improvements
    • This includes the 10% contingency reserve
    • Loan amount calculation is Sales Price + Bid + Contingency Reserve ONLY
      • Renovation fees CANNOT be rolled into the loan amount unless it is a REFINANCE and LTV permits.

Note: If cost of renovations exceeds 35k, the Borrower/Seller is NOT allowed to pay the difference at closing from their own funds. If maximum amount is exceeded use HomeStyle Renovation program.

Contingency Reserve

A contingency reserve equal to 10% of the total costs of the repairs/improvements must be established and funded for all mortgages to cover required unforeseen repairs or deficiencies that are discovered during the renovation.

Contractor Validation

  • Contractor is selected by the borrower and approved by the lender
  • Contractor validation will be completed by the Renovation Department
  • Maximum of three (3) contractors
  • General Contractor is preferred but not required
  • Follow state and local requirements for licensing of contractor(s). If a general contractor is not licensed for work that requires a license (i.e. plumbing, electrical, HVAC, etc.) obtain:
  • proof of the general contractor's liability insurance coverage of at least 2 times the total bid, OR
  • the license of the sub-contractor completing the work.
  • “Do-It-Yourself” Projects are NOT acceptable even if the Borrower is a licensed contractor.
  • Contractor on the project CANNOT be one of the following. (NO EXCEPTIONS):
    • Borrower
    • Borrower's employer
    • Members of Borrower's family
    • Seller
    • Realtor involved in transaction
    • Loan Officer involved in transaction

TEXAS PROPERTIES ONLY - It is important to remind the borrower that their contractor(s) will be required to attend closing

STATES WE LEND IN:

Alabama, Alaska, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming