Renovation Mortgages
With Renovation Mortgages, borrowers can get access to permanent financing options they need to repair, restore, rehabilitate or renovate their existing site-built homes.
These types of products can help borrowers who want flexible financing options in order to combine renovation mortgages with many other Freddie Mac products, including low down payment mortgages. It also helps borrowers who need to remove a co-borrower or add a related person to the permanent financing under specific circumstances.
There are expanded options to drive more loan volume with Renovation 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 low down payment mortgages as Renovation Mortgages.
Who are Renovation Mortgages for?
- Borrowers looking for flexible financing options
- Borrowers who need to secure 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.
Product Features
- 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
- Renovation Mortgages with a settlement date more 12 months after the effective date of permanent financing are not eligible for sale under MultiLender Swap
- 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 Renovation Mortgages. The ULDD Data Points and valid values that must be delivered are determined by both (1) the type of mortgage (i.e., Renovation Mortgage), and (2) the type of loan documentation used for the mortgage.
- Property Type/Eligible Properties
- Existing 1- to 4-unit site-built homes
- Manufactured homes are not eligible
- Primary residence
- Investment property
- Second homes
- Maximum LTV Ratios
Values used to determine LTV, TLTV, and HTLTV for Renovation Mortgages are calculated according to the requirements in Guide Chapter 4602.10.
- Eligibility/Underwriting
- 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
- Transaction Type
- Purchase
- No cash-out refinances
- Cash-out refinances
- 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)
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Resources for Borrowers
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