Homepath Renovation: Step by Step
Only available on properties acquired from Fannie Mae that require moderate renovation and designated by Fannie Mae on the http://www.homepath.com
website as eligible for HomePath Renovation financing. Lender must document the file with appropriate pages printed from http://www.homepath.com
showing that the property was eligible for HomePath financing.
Borrower must be an individual, US citizen, permanent resident alien or non-permanent resident alien.
1-4 unit owner-occupied principal residences only. Second homes, investment properties, manufactured homes, condos and co-ops are not eligible
1-unit owner-occupied 97% max loan to value 2-4 units 75% max loan to value
The LTV is calculated from the LESSER of the purchase contract plus the total renovation costs (which includes renovation costs and required contingency) or the â€œas- completedâ€ appraised value.
Full â€œas-completedâ€ appraisal required.
The renovations must be completed within six (6) months after the closing date.
Total Cost: The total renovation costs, including contingency, may not exceed the LESSER of 20% of the â€œas completedâ€ appraised value or $30,000.00. No work can be started prior to closing. Rehab solely for foundation work is not permitted. Any foundation repairs may require a licensed foundation contractor.
Borrower may use more than one contractor; however, additional doc prep charges may apply. Each contractor must submit a Contractor Questionnaire, be accepted by the lender for the program and provide a W-9. Do-it-yourself projects are not eligible.
Do-it-yourself Projects. â€œDo-it-yourselfâ€ borrower projects are not allowed.
Renovation Escrow Account. Funds for renovation will be placed in an insured, interest-bearing account.
Minimum Credit score required is a 660
Max Debt to Income allowed is 45% (may allow up to 50% with strong compensating factors)
Mortgage Insurance is not required; however loans with LTVâ€™s over 80% are subject to applicable loan-level pricing adjustments.
Loan Terms are 30 year fully amortized fixed rates ONLY (No balloons; ARMs; Interest-only)
Escrow deposits for taxes and insurance will be established at closing. Borrower must provide paid-up first yearâ€™s homeowner insurance policy as a requirement of loan closing.
Contractor: Contractors must be licensed and/or registered as required by individual
State and/or local guidelines. All contractors must meet credit and reference guidelines as established from time to time by Construction Loan Committee and in accordance with FNMA HomeStyle guidelines. A Contractor Questionnaire must be filled out and signed by the business principal and include vendor and homeowner references related to the proposed project(s).
Contractor Questionnaire: Contractor(s) must be designated for the construction project. The contractor(s) must complete a Contractor Questionnaire. Include a complete Questionnaire and send to the Construction Lending Department. Contractors must be registered or licensed in accordance with applicable state laws.
Multiple contractors may be allowed on a case-by-case basis. All contractors must provide a completed Contractor Questionnaire and W-9 tax information.
Agreed Contract: Borrower must enter into a written contract with each contractor who will be performing some or all of the work. Each contract must include (1) the total amount to be paid to the contractor for the work, (2) a description and itemization of the work, (3) the timeframe needed to complete the work and (4) agreement by the contractor that the work will be completed within three (3) months of the closing of the loan
Appraisal: Appraisal to be subject to completion of improvements. Appraiser must reference the existing condition of the property and specify the work to be done in detail. The appraiser must be provided contracts as described above indicating a description and itemization of the work.
NO Cash-out: Borrowerâ€™s closing statement cannot show any cash to Borrower.
Draws: Draws will be sent by Lender to Contractor. Draw requests must be signed by both Borrower and Contractor before submitting to Lender.
Completion: All improvements must be completed in 3 months from closing. A 30 day extension fee of $750 will be charged to Borrower for non-completion. An additional $750 will be charged for each additional 30 days.
I hope this answers some of the questions the Trulia community has about Homepath Renovation. for more information about Homepath visit http://www.ccflender.com
Commercial Capital Funding