{"id":24382,"date":"2022-01-24T23:08:47","date_gmt":"2022-01-24T23:08:47","guid":{"rendered":"https:\/\/203krehabnow.com\/?p=24382"},"modified":"2022-01-24T23:08:47","modified_gmt":"2022-01-24T23:08:47","slug":"fha-203k-loans-vs-fnma-homestyle-loans-2","status":"publish","type":"post","link":"https:\/\/dev203k.orbitwebx.com\/dev203k\/fha-203k-loans-vs-fnma-homestyle-loans-2\/","title":{"rendered":"FHA 203(k) Loans vs. FNMA HomeStyle\u00ae Loans?"},"content":{"rendered":"<p style=\"text-align: center;\"><strong>FHA 203(k) Loans vs. FNMA HomeStyle\u00ae Loans \u2013 Which is better for you?<\/strong><\/p>\n<p>A mortgage renovation loan comes in many flavors, and CMG Home Loans offers two: FHA 203(k) and FNMA HomeStyle\u00ae. When it\u2019s time to make changes to your home, the loan you choose will be determined by several factors, including the kind of improvements you\u2019ll be making, the overall cost of those improvements, and your budget.<\/p>\n<p>Generally, FHA 203(k) loans work for homebuyers who are making structural repairs such as plumbing or even an upgraded kitchen to improve functionality. HomeStyle\u00ae requires a stronger credit score and provides funding power for homeowners to make \u201cluxury\u201d improvements like a new pool or a modernized bathroom. You can completely update your home, including bathrooms or kitchen remodels. You can even add square footage. Just about anything you can think of, you can do.<\/p>\n<p>Let\u2019s take a look at these two loans programs, the differences between them and which you should choose when you\u2019ve decided that your home needs some changes.<\/p>\n<h2><strong>What is an FNMA HomeStyle \u00ae Mortgage?<\/strong><\/h2>\n<p>The Federal National Mortgage Association (FNMA), commonly called Fannie Mae, offers the HomeStyle\u00ae program. Fannie Mae is a government-sponsored enterprise (GSA), so their loans are conventional ones backed by private lenders, not a federal government agency. FNMA HomeStyle\u00ae allows borrowers to fund what could be called &#8220;luxury&#8221; home improvements beyond what many other renovation loans allow. Examples of upgrades you can pay for include:<\/p>\n<ul>\n<li>Permanent landscaping features<\/li>\n<li>A remolded bathroom<\/li>\n<li>Room additions<\/li>\n<li>A backyard deck<\/li>\n<\/ul>\n<p>You can use a HomeStyle\u00ae loan for almost any type of home, including single-family houses, condos and manufactured homes. If you\u2019re buying a home, you can get a less expensive fixer-upper and use a HomeStyle\u00ae loan to pay for repairs.<\/p>\n<p><a href=\"https:\/\/www.homebridge.com\/renovation-lending\/fnma-homestyle\/\">Click here to read more about Fannie Mae HomeStyle Loans!<\/a><\/p>\n<h2><strong>What is an FHA 203(k) rehab mortgage loan?<\/strong><\/h2>\n<p>FHA 203(k) loans are part of the larger Federal Housing Administration (FHA) mortgage program. They\u2019re federally backed and designed to help borrowers who would benefit from flexible credit and debt-to-income ratio requirements. There are, however, some requirements you\u2019ll want to consider.<\/p>\n<p>FHA 203(k) loans focus on repairs and structural changes. In addition, they establish an escrow account that holds the money for your renovation contractor.<\/p>\n<h2><strong>What are the main differences between FHA 203(k) and FNMA HomeStyle \u00ae<\/strong><\/h2>\n<p><em>Mortgage Insurance<\/em><\/p>\n<p>Both loans require mortgage insurance, though the terms and flexibility that come with a HomeStyle\u00ae loan can be better than those of an FHA 203k loan. With FHA 203k loans, you\u2019ll have to pay a flat percentage for mortgage insurance every month. Your credit score and LTV have no impact on the cost of your mortgage insurance, nor will you be able to cancel it.<\/p>\n<p>With the HomeStyle\u00ae loan, you won\u2019t have to pay upfront mortgage insurance. Additionally, the cost of mortgage insurance every month will be based on your credit score and LTV. The lower your LTV and the higher your credit score, the less you\u2019ll have to pay for mortgage insurance. Once your LTV is less than 80 percent of your home\u2019s value, you can request the mortgage insurance be dropped.<\/p>\n<p><em>Maximum renovation amount<\/em><\/p>\n<p>There are two kinds of FHA 203(k) loans: The limited (formerly known as the streamline 203(k) and the standard. As the name may suggest, the 203(k) limited caps its funding at $35,000 and will help fund cosmetic changes. 203(k) standard loans fund major renovations or structural changes that cost at least $5,000.<\/p>\n<p>Your HomeStyle\u00ae loan maximum is based on the home&#8217;s after-renovation value (ARV). You\u2019ll be able to borrow up to 95% of that amount. If, for example, your home is worth $200,000 but will be worth $300,000 after upgrades, you\u2019ll be able to borrow a max of $285,000 \u2013 or 95%.<\/p>\n<p><em>Difference of Down Payment Needed<\/em><\/p>\n<p>You can save costs if you purchase a home with a combined purchase and renovation loan. That\u2019s because you can go after low-cost homes in need of a little TLC. In addition, you only pay one set of closing costs for both loans.<\/p>\n<p>An FHA 203(k) loan is federally backed, while HomeStyle\u00ae is a conventional loan. This means that the down payment requirements will be less for the FHA 203(k) loan, and they reach only 3.5% of the total cost.<\/p>\n<p>For HomeStyle\u00ae loans, the down payment requirements vary a little based on certain factors. The minimum down payment is 3% for most primary homes. However, lenders vary in what they require for a down payment. For investment properties, the minimum down payment is 20%.<\/p>\n<p><em>Investment properties vs. primary residence<\/em><\/p>\n<p>You can fund almost any renovation project with a HomeStyle\u00ae loan. They can be used for single-family homes, multi-unit, condos and manufactured homes. You can also use a HomeStyle\u00ae loan to renovate an investment property as well as your primary residence.<\/p>\n<p>FHA 203(k) loans can be used to upgrade all the same types of properties as a HomeStyle\u00ae loan, except for an investment property or second home. One thing that is possible is to buy a multi-unit and live in one of the units, and then it is considered a primary residence.<\/p>\n<h3><strong>Choosing the Right Renovation Loan<\/strong><\/h3>\n<p>The right renovation option is the one that fits your renovation goals. In general, a Fannie Mae HomeStyle\u00ae loan offers great renovation options and highly competitive rates. However, your financial position may make an FHA 203(k) loan ideal.<\/p>\n<p>As a top-rated mortgage professional*, I understand how to deliver service with the personal touch that your unique goals require. My mission is to provide a simple, easy, and affordable renovation loan process.<\/p>\n<p>To learn more about our 203K renovation loan visit Home Renovation Loans (FHA 203k | Fannie Mae HomeStyle). Contact me today to reach your homeowner goals!<\/p>\n<p>HomeStyle\u00ae is a registered trademark of Fannie Mae.<\/p>\n<p>*Leesa Sandoval has been listed as a Top 200 Mortgage Originator by Mortgage Executive Magazine, named one of D Magazine&#8217;s Best Mortgage Professionals and Top 100 Mortgage Loan Originator in Units by the National Association of Minority Mortgage Bankers of America (NAMMBA).<\/p>\n","protected":false},"excerpt":{"rendered":"<p>FHA 203(k) Loans vs. FNMA HomeStyle\u00ae Loans \u2013 Which is better for you? A mortgage renovation loan comes in many flavors, and CMG Home Loans offers two: FHA 203(k) and FNMA HomeStyle\u00ae. When it\u2019s time to make changes to your home, the loan you choose will be determined by several factors, including the kind of [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":24383,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[58],"tags":[],"class_list":["post-24382","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mortgage"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>FHA 203(k) Loans vs. FNMA HomeStyle\u00ae Loans? - 203krehabnow<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/dev203k.orbitwebx.com\/dev203k\/fha-203k-loans-vs-fnma-homestyle-loans-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"FHA 203(k) Loans vs. FNMA HomeStyle\u00ae Loans? - 203krehabnow\" \/>\n<meta property=\"og:description\" content=\"FHA 203(k) Loans vs. FNMA HomeStyle\u00ae Loans \u2013 Which is better for you? A mortgage renovation loan comes in many flavors, and CMG Home Loans offers two: FHA 203(k) and FNMA HomeStyle\u00ae. 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