CHOICERenovation allows lenders to deliver loans to Freddie Mac where the borrower uses the loan proceeds to pay for the renovations.
This solution addresses a gap in the market for lenders looking for a robust, conventional offering to support renovation financing and provide cost-effective solutions for borrowers.
Offer more flexibility to your borrowers through any of our eligible fixed rate and adjustable rate mortgages, in addition to Home Possible®, super conforming and HomeOne® mortgages.
Who are CHOICERenovation Mortgages for?
- Borrowers looking for convenience and cost savings by financing their home purchase and renovation costs in a single-closing transaction.
- Homeowners who need financing to make home improvements or repairs to their existing properties or a home they intend to purchase.
- First-time homebuyers, homeowners looking to age in place or multigenerational families in need of living space customization.
This Bulletin announces updates to CHOICERenovation® Mortgages, affordable lending and housing preservation, SOFR ARMs, income and asset requirements, postfunding quality control, and more.
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.
CHOICERenovation® – Our Solution for Financing Home Improvements
- Eligible Mortgage Products
- Fixed rate and adjustable rate mortgages
- Freddie Mac Home Possible mortgages
- Freddie Mac HomeOne® mortgages
- Super conforming mortgages
- Delivery Requirements
- Final inspection (442)
- Delivered with IFI codes
- Proof of first lien position
- Property Type/Eligible Properties
- 1-4-unit primary residence
- Manufactured homes
- 1-unit second homes
- 1-unit investment property
- Units located in planned unit developments (PUDs), condominiums, cooperatives (if permitted under the Seller’s Purchase Documents) or leasehold estates are acceptable
- Maximum LTV Ratios
- 1-unit primary: 95% (FRM/ARM), FTHB if >95% HomeOne® only; 97% Home Possible® only
- 2-unit primary: 85% (FRM/ARM)
- 3- and 4-unit primary: 80% (FRM/ARM)
- 1-unit second home: 90% (FRM/ARM)
- 1-unit investment properties: 85% (FRM, 7/1, 10/1, 7/6-Month and, 10/6-Month ARMs)
- Manufactured home 95%/95%
TLTV to 105% with eligible Affordable Seconds (only with Home Possible and HomeOne®)
- Limited to Loan Product Advisor℠ only
- Transaction Type
- No cash-out refinance (NCOR)
Growing Your Business
From valuable training and networking events to advanced tools and applications that help you work smarter, Freddie Mac has the resources you need to expand into new markets and grow your revenues.
- Expand your market opportunity. Allow borrowers to purchase homes and finance the cost of renovations with a single-close mortgage, saving them time and money.
- Expand your business by meeting a greater variety of client needs. Offer a mortgage financing solution to address the increasing demand for cost-effective, aging in place housing solutions, especially for those borrowers who rely less on savings to pay for improvements.
- Increase liquidity. Deliver loans prior to the completion of renovation projects through our CHOICERenovation Term of Business (TOB)*.
- Support the need for affordable housing and address the aging housing supply: According to Harvard Joint Center for Housing Studies, almost 80% of the nation’s 137 million homes are now at least 20 years old and 40% are at least 50 years old. Allow homeowners and homebuyers the opportunity to finance their renovations and increase the value of an older home.
*Lenders who choose to deliver CHOICERenovation mortgages prior to completion of the renovations must obtain prior written approval from Freddie Mac and deliver the mortgages with recourse that will remain in place during the renovation period.
Benefits to Your Borrowers
- Save time and money. Allow borrowers to purchase homes and finance the cost of renovations with a single-close mortgage.
- Package the benefits. Combine this offering with our low-down payment and higher LTV solutions to make financing renovation projects even more affordable.
- Increase home values. Whether borrowers are looking to improve a home they intend to purchase or upgrade their current living conditions, home improvements and repairs can increase the value of their homes.
NEW! Area Median Income and Property Eligibility Tool
To help you determine whether a loan may be eligible for a credit fee cap, enter a property’s address to find out the AMI% for that location and whether your borrowers meet the AMI% requirements for certain Freddie Mac mortgage products.
Side-by-side Comparison: Freddie Mac CHOICERenovation mortgage and CHOICEReno eXPress mortgage
Learn more about the features of both of our renovation mortgage offerings - CHOICERenovation and CHOICEReno eXPress.
CHOICEReno eXPress® Mortgage
CHOICEReno eXPress® is a streamlined renovation mortgage that enables you to offer an additional financing option for borrowers who are looking to finance smaller-scale home renovations.
CHOICERenovation Fact Sheet
Learn more about our latest solution for financing home improvements designed for borrowers looking for convenience and cost savings by financing both their home purchase and renovation costs in a single loan.
CHOICERenovation® Mortgages Webinar
Learn about our new renovation offering in which the proceeds are used to pay for renovations directly. With CHOICERenovation, there is no other financing and no other loan to pay off.
CHOICERenovation TOB Path Blueprint
Getting Started. Do you have a Freddie Mac account executive (AE)? Contact your AE today to inquire about usage of the CHOICERenovation TOB. If not, please call 800-FREDDIE to be directed to an AE who will assist you.
CHOICERenovation Seller Eligibility Application and Submission Attachment
Under TOB, lenders may have the option to sell their loans prior to the completion of renovation projects. After speaking with an account executive, download this fillable form to begin the process to apply for eligibility.
CHOICERenovation: Eligible Renovations Learning Clip
Learn about some of the renovations that can be completed to a property with an existing dwelling using this offering.
CHOICERenovation® Mortgage: Three Options
Learn about the 3 options available with this offering: Renovations can be completed before or after the mortgage is sold to us, including CHOICEReno eXPress℠
Rural Residents Say Their Homes Cause Health Concerns—Renovation Loans Can Help
Younger rural residents feel their homes affect their physical health and stress. What are their main concerns and how can renovation funding help them live more comfortably and healthfully?
Another Active Hurricane Season? Help Homeowners Prepare.
Since experts anticipate another above-normal hurricane season, it’s critical that the mortgage industry have frequent conversations with homeowners about the advantages of renovations to reduce the impact of storm damage.
Concentration of Aging Homes in Lower-Income Areas Underscores Need for Mortgage Innovation
More than half of U.S. homes are over 40 years old and concentrated in minority or moderate- to low-income neighborhoods in urban areas. How can lenders make it more economical to rejuvenate these aging houses?
Where Is the Aging Housing Stock in the United States?
An older housing stock, if not well-maintained, is associated with issues such as energy efficiency and the preservation of affordable housing. However, aging housing stock is a pervasive problem throughout the country.
CHOICERenovation Lender Marketing Flyer
Download this high-quality, ready-to-use promotional piece we've created to help you promote CHOICERenovation to your borrowers and brokers – another way to leverage cost-effective, customizable marketing opportunities.
CHOICERenovation® Mortgages: Recorded Webinar
During this prerecorded 45-minute webinar, you will learn about our new renovation offering in which the proceeds are used to pay for renovations directly.
CHOICERenovation Maximum Mortgage Worksheet
Lenders can use this worksheet tool to determine how much their borrowers can allocate toward home renovation costs.
Renovation Loan Agreement
The Renovation Loan Agreement provides sample language to help lenders more efficiently implement CHOICERenovation.
The Renovation Contract provides sample language to help lenders more efficiently implement CHOICERenovation.
CHOICERenovation Mortgage Borrower Tips
Please review these important tips about Freddie Mac’s CHOICERenovation mortgage offering and home improvement projects. This document can also be used as general best practices information for many home improvement projects.
CHOICERenovation Mortgage Requirements in the Single-Family Seller/Servicer Guide
Resources for Borrowers
Reaching and educating borrowers – and helping them find the right mortgage – is essential for your business. Freddie Mac provides an array of materials you can share with your clients and business prospects.
Loan Advisor® uncovers hidden value for your business. Our data and models reveal opportunity at every stage of the lending process.
Become a Seller/Servicer
Being a Freddie Mac client means you'll have access to a wide range of mortgage solutions to meet the diverse needs of your borrowers and your business, along with technology solutions that help you work smarter.
The Freddie Mac Home Possible® mortgage offers more options and credit flexibilities than ever before to help your very low-to low-income borrowers attain the dream of owning a home with a down payment as low as 3%.
Available to qualified first-time homebuyers for a low down payment of just 3%, HomeOne® serves the needs of many first-time homebuyers.