Time and time again, I’ve worked with first-time homebuyers who are making every effort to save up for a down payment in hopes of buying a home. Then, when they find a home they truly love, they realize it’s lacking in updates. The greatest concern for these buyers is that they won’t have leftover savings for renovations once their down payment is made.
Steve Hankla from Doorway Home Loans joins me today to talk about a product his company offers to help first-time buyers who find themselves in this very situation. With Steve and Doorway Home Loans’ help, buyers may qualify for a loan that gives them financial assistance in this way.
Introduced by Fannie Mae, the new product Steve is most excited about is called the Homestyle Program. Acting as a competitor to the FHA 203k loan product without all the limitations, the Homestyle Program provides you with the purchase money and rehabilitation money on top of that for just 5% down on the whole package.
A licensed contractor will go to the property and then come up with a bid on all the necessary updates. From there, they’ll do an after-market or after-rehab value on the appraisal, and Doorway will lend the whole amount plus six months’ worth of payments on the property while the renovations are in progress.
Unlike the FHA 203k, the Homestyle Program isn’t reserved for cosmetic repairs only. Not only will this product apply to new paint and carpet, but it also affords financing for room additions and even a built-in swimming pool. This product will literally allow you to turn an abandoned project into a fully rehabbed, restored, and livable home.
There’s no maximum allowance for repair costs, but the loan limit matches Fannie Mae’s recent conforming loan limit of $484,000. To utilize the Homestyle Program, the home you purchase will need to be valued at around $450,000.
Your lender will look at the totality of the purchase price plus rehabilitation costs or the aftermarket value, and they’ll offer a 95% loan on whichever is the lowest of the two.
A big thanks to Steve for taking the time to tell us all about this wonderful product. If you’d like to reach him to discuss the pre-approval process or learn more about the Homestyle Program, give him a call at 714-470-5626 or visit him online at SteveHankla.com.
If you’re looking to buy, sell, or invest in real estate or have any questions for me, feel free to reach out to me at 1-800-309-1528. I hope to hear from you soon!