Construction Conversion Mortgages
Freddie Mac Construction Conversion Mortgages offer a variety of competitive sale execution options for loans processed as purchase transactions.
Plus, lenders can sell us loans processed as no-cash out and cash-out refinances (site-built only).
There are expanded options to drive more loan volume with Construction Conversion Mortgages available through the Single-Family Seller/Servicer Guide and enhanced niche-marketing opportunities to meet your borrowers' needs when you process many of our other low down payment mortgages as Construction Conversion Mortgages.
Who are Construction Conversion Mortgages for?
- Borrowers who need to combine construction conversion mortgages with other mortgage products, such as low down payment mortgages.
- People looking for flexibility when securing permanent financing.
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.
- Credit Fees
See Guide Exhibit 19 for details on applicable Credit Fees in Price.
- Delivery Requirements
Refer to Guide Section 6302.28(b) for special delivery instructions for Construction Conversion Mortgages. The ULDD Data Points and valid values that must be delivered are determined by both (1) the type of mortgage (i.e., Construction Conversion Mortgage), and (2) the type of loan documentation used for the mortgage.
- Loan Product Advisor Mortgages
- Non-Loan Product Advisor Mortgages
- All mortgages must meet the risk class and/or minimum Indicator Score requirements in Exhibit 25A, where applicable
- Eligible Mortgage Products
- Fixed-rate mortgages
- Most ARMs eligible for sale to Freddie Mac
- Freddie Mac Home Possible® mortgage
- Super conforming mortgages
- Execution Options
- Servicing-released Cash
- Servicing-retained Cash
- Fixed-rate Guarantor
- WAC ARM Guarantor
- Construction Conversion Mortgages with a settlement date more 12 months after the effective date of permanent financing are not eligible for sale under MultiLender Swap
- Maximum LTV Ratios
Values used to determine LTV, TLTV, and HTLTV for Construction Conversion Mortgages and Renovation Mortgages are calculated according to the requirements in Guide Section 4602.10.
- Property Type/Eligible Properties
- A newly built or constructed 1- to 4-unit site-built home
- A newly purchased 1-unit manufactured home that never has been attached to a foundation
- Primary residence
- Investment property
- Second homes
- Transaction Type
- No cash-out refinances
- Cash-out refinances (Site-built only)
- If mortgage proceeds are used to replace an Interim Construction Financing, the transaction must meet the requirements of Chapter 4602 of the Single-Family Seller/Servicer Guide (Guide)
Growing Your Business
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Resources & Learning
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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.
CreditSmart® is a suite of educational resources designed to empower consumers with the skills and knowledge to assist them through every stage of their financial capability and homeownership journey.
Take advantage of the information we have gathered here to expand your efforts in reaching homebuyers in today’s changing marketplace.
Whether your borrowers rent, own, or plan to buy, we offer the resources to help make informed decisions and support their success.
With Renovation Mortgages, borrowers can get access to permanent financing options they need to repair, restore, rehabilitate or renovate their existing site-built homes.