Homestyle Renovation Fannie Mae Jumbo loans?!

[Jason Ines]

Hello BP!

Has anyone ever done a jumbo loan (80/10/10) concurrently with a Fannie Mae Homestyle Renovation loan? Is this even possible? 

I am a first time home buyer saving up for a down payment and thought this would be a great way to acquire my first home. The way I want to execute would be FannieMae Homestyle Renovation loan for the 80% then second mortgage for 10% and put down 10%. Looking around 350k home prices in southern California. I'm trying to utilize a second mortgage and benefit from writing off the interest from the second mortgage as oppose to paying the PMI with no tax deduction and at the same time finding a good deal to renovate, live in, then later buy and hold, or sell with appreciation. Rinse and repeat.

Is this even possible? Anyone with homestyle Renovation, 203k 203(k) , Fannie mae knowledge please help me!

Thanks in advanced BP. 

-Jason

[Carrianne Mucho]

@Jason Ines I think you're overthinking it. Since it's going to be your primary residence, it may make most sense to do a 90% Fannie Mae Homestyle, then when renovation is complete, refi into an 80% LTV loan assuming you've created enough equity to do that. Yes, you'll have PMI this way but if it goes well, its only for a few months until the work is completed.

A 203k can get you in with only 3.5% down but your offer becomes less competitive and with less equity invested upfront, less likely you can "earn" your way out of PMI.

More detailed information would be helpful to truly give you the best advice.  Feel free to PM me direct or use my profile info to contact me directly.  I'm happy to chat and explain these loan types and how a renovation loan works.  I grew up in San Diego so although I'm in NorCal now, I'm very familiar with SoCal...or I can refer you to someone closer to you.  

Glad to see you are doing your research!  I'm always amazed at how many people in the biz don't know about Homestyle!