When a HomeStyle Renovation mortgage loan is originated as a limited cash-out refinance transaction, the loan amount may include
- the amount required to satisfy the existing first mortgage;
- the amount required to satisfy any outstanding subordinate mortgage liens that were used to acquire the property;
- closing costs, prepaid fees, and points; and
- the total renovation costs, including allowable renovation-related costs for the home improvements up to the maximum permitted LTV and CLTV ratios.
The borrower may not obtain any other funds from the transaction, including those that are generally allowed for a limited cash-out refinance transaction. Excess funds, if any, after renovations are completed, may be applied to the loan balance as a curtailment or may be reimbursed to the borrower for the cost of actual supplies or additional renovations for which paid receipts are provided. The value of sweat equity may not be reimbursed.