Freddie Mac Introduces CHOICERenovation Mortgage

Freddie Mac issued Bulletin 2019-14, introducing the CHOICERenovation mortgage. The CHOICERenovation mortgage is a new mortgage product, that allows borrowers to use mortgage proceeds to pay for repairs and improvements. The CHOICERenovation product supplements Freddie Mac’s current Renovation Mortgage. However, unlike the Renovation Mortgage, the CHOICERenovation mortgage does not require borrowers to obtain interim construction financing prior to securing permanent financing. In addition, the CHOICERenovation mortgage allows approved sellers to deliver mortgage prior to completion of renovations. The Bulletin sets forth CHOICERenovation mortgage requirements with respect to: Freddie Mac approval; eligibility; maximum permissible renovation costs; delivery; transfer of servicing; and servicing. A CHOICERenovation mortgage may be secured by: a 1-to 4-unit primary residence; a second home; a 1-unit investment property; a manufactured home; or a condominium unit, planned unit development or a cooperative unit (if permitted under the seller’s purchase documents). Unless specified otherwise in the Single-Family Seller/Servicer Guide, all eligible mortgage products (including Home Possible mortgages) are eligible for delivery as CHOICERenovation mortgages. The Bulletin is effective immediately.

Click Here to View the Freddie Mac Guide Bulletin 2019-14