There are many reasons to invest in fund control software, including the fact that laws around fund control are always changing. While your company will want to stay current on them, you may not want to revamp your protocol to handle them every single time a change is made. When you turn to us for fund control software, it is automatically updated as changes taken place. This is just one of the many reasons to contact us at 800-625-5972 or info@eclsoftware.com to get started.

In the meantime, read on to learn more about some of the changes to Fannie Mae’s Homestyle Renovation Program. There are actually a lot of changes that could impact the way you do business but we are going to cover four of the most important ones.

An overview of the Homestyle Renovation program

Before we begin, we will take a moment to go over exactly what this program is. It enables a borrower to buy a home or to refinance an existing home loan and include funds in that loan to cover certain costs of repairs, renovations, energy improvements, and remodeling. The lender can then choose to sell back the loan to Fannie Mae before the renovation is completed, subject to limited recourse and additional requirements That must be met.

In recent months, Fannie May has made some enhancements to this program – in fact there are 16 major updates. The organization says they added these enhancements due to an increase interest by homeowners in renovation financing.

1. Manufactured homes are now eligible

Initially, manufactured homes were not eligible for the program. They are now, but they must meet certain requirements. First, they cannot require structural changes. Also, the current LTV ratio requirements that are in place for manufactured homes will still apply. This means that the total funds available for a home for renovation are the lesser of either $50,000 or half of the “as-completed” appraised value.

2. Eligible renovation fund limits have been increased

As of now, the limit on eligible renovation funds for a purchase transaction has been increased. It is now up to 75% of acquisition plus renovation costs, or the as-completed appraisal value – whichever one is less.

3. Lender are now able to release material draws at the beginning of the project

If the purpose is to acquire materials that are clearly identified in the project estimate, then lender are now able to release material draws at the beginning of the project. This is limited to half of the total up-front material costs and some of this money can be used to pay expenses for permits, architect fees, design, etc.

4. Form 1036 has been retired

The Homestyle Completion Certificate, known as Form 1036, has been retired. Now there is a 1004D, the Appraisal Update and / or Completion Report, which is required for completed renovation work and it is required to be submitted whenever a request is made for removal of recourse.