The HomeStyle Renovation mortgage for investors delivers the best cash on cash return when flipping houses. A HomeStyle Renovation loan is great for first-time flippers because it only requires 15% down and it includes funding for needed repairs.

Although you can only have one HomeStyle Renovation loan open at any time, it’s also a great loan for experienced house flippers. Why? Because it’s way cheaper then a hard money loan. And it’s perfect if you want turn your fixer upper into a rental property.

So, whether it’s your first flip or your fiftieth, you should consider this Fannie Mae investor loan to help maximize your profits.

HomeStyle Renovation Mortgage Investors Pros & Cons

HomeStyle Renovation Loan Pros:

• LTV (Loan To Value) up to 85% with PMI, 80% without PMI
• Renovation loan limit of 80% of ARV (After Repair Value)
• Loan includes funding for repairs (in escrow)
• Investor can have up to 3 other active loans
• Super qualified investors can have up 9 other active loans
• You can make multiple draws from repair funds escrow

HomeStyle Renovation Loan Cons:

• Only one HomeStyle renovation mortgage loan at a time
• House inspection required
• Certified contractor required
• ARV appraisal required to justify funding
• Lots of paperwork needed – Statement Of Work, repair estimate, contractor contract, etc.
• Investors limited to one-unit properties; owner-occupant up to a 4-unit property.
• Repairs limited to permanent improvements to the property (attached, not portable)
• Closing can take 45 days or more.
• More paperwork is needed after all repairs are complete to update the title.

HomeStyle Renovation Mortgage Investors vs FHA 203K Rehab Loan

The HomeStyle renovation mortgage is Fannie Mae’s version of the FHA’s 203k rehab loan with some slight differences that make it more investor friendly.

1. FHA 203k rehab loan is only for owner occupants and you must occupy it for a year, although you can use it for a second home.
2. Both FHA 203k loans and HomeStyle Renovation mortgage loans can include repair amounts of up to 50% of ARV.
3. HomeStyle Renovation mortgages have no upfront fee vs. FHA 203k fee of 1.75%.
4. You can keep the HomeStyle loan in place if you are turning it into a rental property.
5. You can use a HomeStyle loan to finance upgrades to an existing rental property you already own.

This video explains in depth the differences between renovation loans like the FHA 203k, the discontinued HomePath Renovation loan, and the HomeStyle Renovation loan for investors: