What are the differences between Fannie Mae HomeStyle Loan and FHA 203k?

What are the differences between Fannie Mae HomeStyle Loan and FHA 203k?

The Fannie Mae HomeStyle Loan is a conventional loan that allows for renovations, while the FHA 203k is a government-backed loan aimed at low-to-moderate income borrowers. HomeStyle can be used for a wider range of properties and renovations.

Which one is better for first-time homebuyers?

It depends on your financial situation. FHA 203k loans are often better for first-time homebuyers with lower credit scores, while HomeStyle loans may offer more flexibility for those with stronger credit.

What are the eligibility requirements for each?

For FHA 203k, you need a minimum credit score of 500, while HomeStyle requires a score of at least 620. Both have specific debt-to-income ratio requirements.

Can I use these loans for investment properties?

Yes, you can use a HomeStyle Loan for investment properties, but FHA 203k loans are primarily for owner-occupied homes.

What are the interest rates like for each loan?

Interest rates can vary based on market conditions and your credit score, but generally, FHA loans may have slightly lower rates due to their government backing.