HOMESTYLE RENOVATION MORTGAGECapstone Direct, Inc.

Feb. 2017

Benefits of Renovation Loan

Not every home is move-in ready. Single-close loan includes renovation funds in the amount financed

Single loan for financing the mortgage, repairs and upgrades, based on the “As-Completed” value of the home

Eliminates the need for a second mortgage or the need for a refinance to pay off a construction loan

Loan Terms

30 and 15 year fixed rate mortgages only No ARMS at this time

Property and Renovation Eligibility

1 to 4 Unit Owner Occupied 1 Unit 2nd Homes or

Investment (Non-Owner) NO manufactured homes

Any type of renovation or repair is eligible

Must be affixed to the property and adds value

Maximum Loan Amounts

Purchase Loan to value is based on the

LESSER of• Purchase price and cost of

renovation OR• The ‘As-Completed” Value given

by the appraiser Use the HomeStyle Renovation

Maximum Mortgage Worksheet to calculate the max mortgage amount

REFINANCE Loan to value is based on dividing

the original loan amount by the “As Completed” appraised value of the property

Borrower cannot receive any cash back (lower of 2% or 2K)

Use the HomeStyle Renovation Maximum Mortgage Worksheet to calculate the max mortgage amount

MAXIMUM LOAN TO VALUES

95% 1 Unit Principal residence

85% 2 Unit Principal residence

75% 3-4 Unit Principal residence

90% 1 Unit Second Home

85% 1 Unit Investment

75% 1 Unit Investment - Refinance

Hazard and Mortgage Insurance

Borrower must have hazard insurance in place to cover the estimated “AS-Completed” value of the home after renovation

Mortgage Insurance, if required based on LTV, must be in place before closing and coverage is based on the estimated value of the home AFTER renovation.

Contractors

Borrower must choose contractor Lender must review the contractor

• Adequately qualified and experienced

• Licensed

• Insured

Borrower must have a construction contract with their Contractor Plans and specifications must be prepared by a registered, licensed or certified general

contractor or architect. The plans as specifications should fully describe all work to be done and provide an indication of when various jobs or stages of completion will be scheduled (including Start and Job completion dates).

Renovation Costs

Limited to 50% of the “AS Completed” appraised value of the home May include:

• Labor and Material

• Soft Costs (Architect fees, permits, licenses)

• Contingency Reserve

• 10% of the cost of labor, materials, and soft costs

• Optional unless the property is 2-4 Units

• Payment reserve –

• Up to 6 months – only if the home is uninhabitable