CHOICEReno eXPress® FAQ
The information on this page is not part of, and is not a replacement or substitute for, the requirements found in the Freddie Mac Single-Family Seller/Servicer Guide and your other Purchase Documents.
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What is CHOICEReno eXPress®?
CHOICEReno eXPress® is a new streamlined renovation mortgage option intended for borrowers looking to finance relatively small-scale renovations. CHOICEReno eXPress is part of our CHOICE suite of mortgage solutions and is an expansion of the CHOICERenovation® offering that provides more financing flexibilities for lenders and borrowers. This mortgage solution enables Sellers to deliver CHOICEReno eXPress mortgages to Freddie Mac prior to completion of the renovations without recourse, provided certain requirements are met.
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Why did Freddie Mac introduce CHOICEReno eXPress?
CHOICEReno eXPress allows homebuyers to include renovation costs in the mortgage financing to assist in addressing the aging housing supply, the need for affordable housing and the increasing demand for aging-in-place housing solutions. It enables Sellers to sell CHOICEReno eXPress mortgages to Freddie Mac prior to completion of the renovations without recourse, provided certain requirements are met – giving them additional flexibility.
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How does CHOICEReno eXPress differ from the other options under the CHOICERenovation offering?
Freddie Mac CHOICEReno eXPress mortgage
Freddie Mac CHOICERenovation mortgage
Overview
- Our streamlined renovation financing solution allows borrowers to use mortgage funds to finance renovations to the property after the note date.
- CHOICEReno eXPress does not require borrowers to obtain interim construction financing. Borrowers can use the mortgage proceeds from the eligible mortgage to pay for the renovations.
- Any Freddie Mac Seller can deliver CHOICEReno eXPress mortgages prior to completion of the renovations without recourse.
Overview
- Our renovation financing solution allows borrowers to use mortgage funds to finance renovations to the property after the note date.
- CHOICERenovation does not require borrowers to obtain interim construction financing. Borrowers can use the mortgage proceeds from the eligible mortgage to pay for the renovations.
- Approved Sellers can deliver CHOICERenovation mortgages prior to completion of the renovations with recourse.
Maximum Available Financing
- For mortgages located in designated Duty to Serve high-needs areas, the total cost of the financed renovations must not exceed 15% of the value described in either Section 4607.7(b), for purchase transactions, or Section 4607.7(c), for “no cash-out” refinance mortgages, as applicable.
- For mortgages not in Duty to Serve high-needs areas, the total cost of the financed renovations must not exceed 10% of the value described in either Section 4607.7(b), for purchase transactions, or Section 4607.7(c), for “no cash-out” refinance mortgages, as applicable.
- Note: See Section 4607.7(d) for the maximum financed renovation costs for CHOICEReno eXPress mortgages secured by manufactured homes.
- The renovation funds must be deposited into a completion escrow account.
Maximum Available Financing
- The total cost of the financed renovations must not exceed 75% of the value described in either Section 4607.7(b), for purchase transactions, or Section 4607.7(c), for “no cash-out” refinance Mortgages, as applicable.
- Note: See Section 4607.7(d) for the maximum financed renovation costs for CHOICERenovation mortgages secured by manufactured homes.
- For CHOICERenovation mortgages delivered prior to completion of the renovations with recourse, the renovation funds must be deposited into a Custodial Account for Renovation Funds (as described in Section 4607.12).
Seller Eligibility
- All Sellers may deliver CHOICEReno eXPress mortgages prior to completion of the renovations.
Seller Eligibility
- All Freddie Mac Sellers may deliver CHOICERenovation mortgages after the renovations are complete.
- Approved Sellers may deliver CHOICERenovation mortgages prior to completion of the renovations.
Eligible Mortgage Products
- Fixed-rate and adjustable-rate mortgages.
- CHOICEReno eXPress mortgages may be combined with Home Possible®, HomeOne®, HFA Advantage® and super conforming mortgages.
Eligible Mortgage Products
- Fixed-rate and adjustable-rate mortgages.
- CHOICERenovation mortgages may be combined with Home Possible®, HomeOne®, HFA Advantage® and super conforming mortgages.
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Why did Freddie Mac introduce CHOICEReno eXPress?
CHOICEReno eXPress allows homebuyers to include renovation costs in the mortgage financing to assist in addressing the aging housing supply, the need for affordable housing and the increasing demand for aging-in-place housing solutions. It enables Sellers to sell CHOICEReno eXPress mortgages to Freddie Mac prior to completion of the renovations without recourse, provided certain requirements are met – giving them additional flexibility.
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Does Freddie Mac continue to offer construction conversion and renovation mortgages?
Yes. Freddie Mac is committed to offering a variety of solutions and continues to offer the current construction conversion and renovation mortgage offerings.
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What requirements does the seller have to meet to obtain approval from Freddie Mac to deliver CHOICEReno eXPress mortgages?
Sellers do not need to obtain prior written approval to deliver CHOICEReno eXPress mortgages. However, if the requirements outlined in Guide Section 4607.1 (c) will not be met (e.g., all renovations must be completed within 180 days of the note date), renovations not completed by the settlement date must be financed with CHOICERenovation mortgages as described in Section 4607.1(b).
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Can borrowers purchase renovations from a home improvement store and finance such renovations with a CHOICEReno eXPress mortgage?
Renovations purchased from a home improvement store pursuant to Section 4607.10(c) may apply to CHOICEReno eXPress, in addition to the other options under the CHOICERenovation offering.
If the Borrower chooses a home improvement store to have renovation work completed and the home improvement store’s renovation program requires payment-in-full at the point of purchase, renovations may be purchased from the home improvement store, provided the requirements in Section 4607.10(c) are met. These requirements include the Seller’s review of the home improvement store’s renovation program.
If the requirements in Section 4607.10(c) are met:
- Up to 100% of the cost of materials may be advanced to the home improvement store, and
- Up to 100% of the renovation costs identified in the renovation contract (including labor costs) may be paid to a home improvement store at closing in lieu of such funds being deposited into the completion escrow account or Custodial Account for Renovation Funds (as described in Sections 4607.11 and 4607.12), as applicable
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What are the eligible uses of CHOICEReno eXPress mortgage proceeds?
Refer to Section 4607.6(a) for eligible uses of mortgage proceeds, such as adding or renovating an ADU, including a manufactured home ADU.
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What are the special delivery requirements for CHOICEReno eXPress mortgages?
Sellers must enter the valid value of:
- Loan Program Identifier CHOICEReno EXpress, or
- Loan Program Identifier CHOICEReno EXpress DTS Area for mortgages located in designated Duty to Serve high-needs areas