The mortgage giant says “CHOICEReno eXPress” helps buyers and owners reduce costs compared to using credit cards or unsecured financing for small-scale projects.
MCLEAN, Va. – Freddie Mac announced a new CHOICEReno eXPress mortgage, which helps homebuyers and homeowners finance the cost of small-scale renovations with a single-close mortgage.
Freddie says its CHOICEReno eXPress fills a need for a streamlined, affordable financing option for buyers who plan to make cosmetic renovations, such as replacing windows and doors, roof repairs, minor remodeling and interior or exterior painting. Freddie posted a list of frequently asked questions on its website.
“CHOICEReno eXPress expands upon the Freddie Mac CHOICERenovation mortgages, which were designed to help address the nation’s aging housing supply … to support the increasing demand for cost-effective financing solutions,” says Danny Gardner, senior vice president of client and community engagement for Freddie Mac’s Single-Family business. “CHOICEReno eXPress will help homebuyers and homeowners reduce their out-of-pocket costs by offering more affordable loan terms than using credit cards or unsecured financing when making small-scale renovations.”
Lenders can sell CHOICEReno eXPress mortgages to Freddie Mac when the loan proceeds are used to pay for renovations of up to 10% of the home’s as-completed value (up to 15% in rural regions with high needs classification). Depending on the purchase price, it doesn’t require special lender pre-approval or lender recourse. A completed inspection is required, however, to verify that the planned renovations were completed.
“Lenders with an interest in providing a renovation mortgage to their clients but limited experience in renovation and construction lending, will also find CHOICEReno eXPress is an attractive offering because of its streamlined operational requirements,” says Gardner.
- Allowing 100% of the cost of materials to be advanced and renovation costs to be paid directly to a home improvement store
- An ability to use proceeds to pay off short-term financing for prior renovations of an existing home
- Allowing a borrower to not occupy a primary residence while renovations are ongoing
Launched in 2019, the CHOICERenovation proceeds can also be used to renovate a property damaged in a natural disaster or for renovations help a borrower prevent damage from a future disaster.
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