Renovation Loans Become A Necessity After Hurricane Harvey
Posted by Alison Barksdale, AVP of Mktg, CU Members Mortgage on 10/5/2017

Because of Hurricane Harvey, the latest home loan demand is focused around renovation.  Home renovation loan products aren’t new to the industry and many exist, but one of the best to assist credit union members struggling through natural disasters such as Hurricane Harvey is Fannie Mae’s HomeStyle® mortgage.  This particular home loan product provides a convenient and economical way for homeowners to make renovations, repairs, or improvements. Both purchase or refinance loans are available and we’re seeing more and more credit unions making this option available to members.

The HomeStyle® loan is similar to a single close construction loan in that there is only one set of closing costs, and there is no second mortgage involved, and no remaining line of credit.  The member can obtain a first mortgage to finance up to 95 percent of the “as-completed” appraised value of the property rather than the present value.  This provides better financing solutions for the member than a second mortgage, home equity line of credit, or other, more costly financing methods with higher rates.

HomeStyle® is available in 15 or 30 year fixed rate terms or adjustable rate loans.  Members can include the cost of architects and designers, energy efficient assessments, engineering and design updates, required inspections, permit fees and more.  Plus, because HomeStyle® is available for principal residences 1-to-4 units, one-unit second homes and even single unit investment properties, the loan is great for more than just disaster recovery. It can also be used by those just doing upgrades, add-ons, and even in-ground swimming pools.

This product is especially good for Credit Unions because it’s a special niche, but more important,  it offers a product that assists the member with a practical and efficient way to restore their homes and their lives following a natural disaster like Harvey.

The HomeStyle® loan is available through any Fannie Mae-approved mortgage lenders.  If that excludes your Credit Union, you do have the option to refer your members to any lender that offers this niche product. 

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