Question: I am going out tomorrow to a house with a free standing wood burning stove as the only heat source. They are doing a HomeStyle loan. Does the home need a central heat source, or is the wood stove OK?

Answer: Several years ago I had an FHA 203k project in Oakley that involved a home built in about 1830 that had a Ben Franklin type stove as the only source of heat. The borrower's didn't want to put in a forced air system but wanted to keep the flavor of this "historical landmark" home. I contacted Lee Bartok at HUD engineering in SF and he indicated that HUD would have no problem with it provided the county or city inspection department didn't. We were able to keep the stove as the only heat source for the home.

Your quesiton is a bit difference as you are doing a HomeStyle® Renovation Mortgage which is Fannie Mae's version of the renovation loan. The key is that Fannie Mae does adhere to the HUD MPS (Minimum Property Standards). The MPS as I recall suggest the heating source must be sufficient to heat the home to 70 degrees at 36" from the floor and have a thermostatic control. That being said I would check with the local jurisdiction, call it out in your report as not meeting the requirements and the reasons you feel mitigate that if the city or county inspection department doesn't have any issues. If they do then all bets are off. I have been able to get pellet stoves approved since they do have thermostat control. The 203b guideline suggests it as low as 50 degrees in all rooms.