Fannie Mae announced significant updates to its Single-Family Selling Guide on Wednesday, introducing a rebranded energy efficiency loan program and loosening restrictions on renovation refinancing and accessory dwelling units (ADUs). The government-sponsored enterprise aims to modernize aging housing stock and increase affordable inventory through these policy shifts.
The updates include the launch of HomeStyle Refresh — which replaces the former HomeStyle Energy program — and major enhancements to the HomeStyle Renovation product.
Additionally, Fannie Mae is expanding eligibility for ADUs on multiunit properties and manufactured homes, signaling a concerted effort to support flexible, resilient and affordable housing options.
In a move to incentivize sustainable housing improvements, Fannie Mae has rebranded its energy-focused offerings as “HomeStyle Refresh.” This updated program allows borrowers to finance energy and resiliency improvements — such as storm surge barriers or wildfire-resistant roofing — without requiring an energy report in many cases.
The program also increases the allowable loan-to-value ratios for these specific improvements, aiming to reduce upfront barriers for homeowners seeking to weatherproof their properties.
In addition, Fannie has adjusted its broader HomeStyle Renovation product to address liquidity issues often faced during construction. Lenders are now permitted to disperse up to 50% of total renovation costs at closing to cover material expenses and permit fees.
Previously, strict limitations on initial draws often hampered contractors’ ability to procure materials early in the process.
Manufactured housing also sees a significant policy shift. Fannie Mae has removed the $50,000 or 50% as-completed value cap on renovation costs for manufactured homes. Under the new guidance, renovation costs are limited to 50% of the as-completed value, aligning the financing structure more closely with site-built homes and enabling more substantial updates to older manufactured units.
Addressing the need for increased housing density, the announcement significantly broadens the eligibility for accessory dwelling units. Fannie Mae will now purchase loans on two- to three-unit properties that include one ADU, a configuration previously ineligible. For single-unit properties, the allowance has been expanded to permit up to three ADUs, provided the property complies with local zoning.
Furthermore, ADUs are now explicitly permitted on single-wide manufactured homes, removing a prior restriction that limited ADUs to multisection units. This change is expected to provide more flexibility for rural and lower-density housing markets where manufactured housing is prevalent.
The Selling Guide update also included technical adjustments to adjustable-rate mortgage (ARM) policies. Fannie Mae removed the requirement that seven- and 10-year ARM loans must have a 3% acceptability parameter, simplifying the underwriting process for these products.
Additionally, the announcement clarified policies regarding mortgage fraud, emphasizing that lenders must have robust procedures to identify and report suspicious activity efficiently.
