HomeStyle Renovation Loan-to-Value (LTV)

Fannie Mae sets specific loan limits for HomeStyle loans. The amount depends on the type of transaction as well as the type of property.

If you purchase a home, the lender figures your loan-to-value (LTV) ratio by determining the ratio between the total loan amount and the completed appraised value. The total loan amount equals the amount you need to purchase the home plus the cost of renovations. The completed appraised value means the value after the contractor completes the renovations.

If you refinance your home, the lender determines your loan-to-value ratio by determining the ratio between the loan amount and the completed appraised value. The loan amount in a refinance equals the amount necessary to pay off your existing loan, plus the cost of renovations.

If you purchase/refinance a single-family or one-unit property, you can borrow up to 95% of the future value of the home. If the property is owner occupied and more than one unit, the following LTVs prevail:

  • 85% of the future value of 2 unit properties
  • 75% of the future value of 3-4 unit properties

If you purchase/refinance a second home, you can borrow up to 90% of the future value of the property. If you purchase/refinance an investment property, it allows you up to 85% of the future value of the property.