The Homestyle Renovation Mortgage provided through Fannie Mae is an option for renovations or repairs utilizing conventional first mortgage financing.
In the SEL-2022-01 Selling Guide announcement posted on February 2, 2022, Fannie Mae announced changes to the Homestyle Renovation Loan Agreement Form 3731 (First American Docutech form Cx22295) to the following sections: B5-3.2-01, B5-3.2-03, B5-3.2-06, B5-3.2-06, E-1-02, E-2-01. These changes affect the times and information required in the loan renovation agreement and the simplification in the documentation for assets.
As a result of these changes, we are modifying the First American Docutech copy of Fannie Mae Form 3731 (Cx22295). In addition to grammatical changes, the most significant updates to the form include:
- Item 2.1.1 now includes the following: the scheduled completion date of the Work, including any intermediate phases, as applicable (“Schedule”); and (iii) a written itemization of the Work and the Contract Price. In addition to being fully executed by both the lender and the borrower at closing and being dated the same date as the note.
- Item 2.1.5 contains updated timing requirements that must be agreed to. It establishes that the work must be completed no later than fifteen (15) months after the loan closing (“Completion Deadline”) except under extenuating circumstances.
- Item 2.1.6 the language has been updated to reflect reasonable entry to the property for inspection to avoid default on this agreement.
- Item 2.1.7 has been updated to reflect that the work must be completed according to the Renovation Contract.
- Item 220.127.116.11 added an acknowledgment and agreement regarding the entry into the property for inspection.
- Item 4.11 and the corresponding (Exhibit “A” – Description of the Property) has been removed from the model form.
These changes will be in effect on March 9, 2022. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
Update 7/7/2022: Adding the [Property Address] text and associated field that print under the “RENOVATION LOAN AGREEMENT” at the top of page 1 to Cx22295 to match the model form.