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Renovation Mortgages
Opportunities to meet your borrowers' home renovation financing needs

Related Products

Expand permanent financing opportunities for more of your borrowers with our Renovation Mortgages for site-built homes – a component of our Mortgages for Newly Constructed Homes offering. Renovation Mortgages offer you and your borrowers greater flexibility, including permitting 18 months between the date of the earliest credit, capacity or collateral document and the settlement date – allowing for longer construction times – and other new opportunities for borrowers seeking permanent financing for home improvements.

With Renovation Mortgages you can offer more of your borrowers the expanded and flexible permanent financing options they need to repair, restore, rehabilitate or renovate their existing site-built homes.

Product Features

Feature

Requirements

Property Type
  • Existing 1- to 4-unit site-built homes
  • Manufactured homes are not eligible
  • Primary residence
  • Investment property
  • Second homes

Eligible Mortgage Products

  • 15-, 20-, and 30-year fixed-rate mortgages
  • Most ARMs eligible for sale to Freddie Mac
  • 5- and 7-year balloon/reset mortgages (non-seasoned)

Transaction Type
  • Purchase
  • No cash-out refinances
  • Cash-out refinances

Maximum LTV Ratios (without secondary financing)
  • Values used to determine LTV, TLTV, and HTLTV for Renovation Mortgages are calculated according to the requirements in Section K33.12 of the Single-Family Seller/Servicer Guide.

Underwriting
  • Loan Prospector Mortgages
  • Non-Loan Prospector Mortgages
  • Minimum Indicator Score of 620 unless otherwise specified in the Guide
  • All mortgages must meet the risk class and/or minimum Indicator Score requirements in Exhibit 25A, where applicable
  • Maximum debt-to-income ratio of 45 percent for manually underwritten mortgages.

Execution Options
  • Servicing-released Cash
  • Servicing-retained Cash
  • Fixed-rate Guarantor
  • WAC ARM Guarantor
  • Mortgages for Newly Constructed Homes, with a Settlement Date more 12 months after the Effective Date of Permanent Financing are not eligible for sale under MultiLender Swap

Delivery Fees
  • See Guide Exhibit 19 [PDF 161K] for details on applicable delivery fees.

Special Delivery Requirements
  • Special characteristics codes must be delivered on Form 11 or 13SF as applicable: see Guide Section 17.38.1
  • D51 and D69 – Renovation Mortgages - Site-built (both SCCs must be delivered)

Single-Family Seller/Servicer Guide
  • Find complete details on requirements for Mortgages for Newly Constructed Homes in Guide Chapter K33.


Download a Renovation Mortgages factsheet [PDF 118K] for more details.

Lender Benefits

  • Expanded options to drive more loan volume with Renovation Mortgages available through the Single-Family Seller/Servicer Guide.
  • New flexibility that matches your borrowers' needs and assists in Gulf Coast rebuilding. You now have 18 months to process, underwrite, document allow for renovation and sell all Renovation Mortgages – allowing for longer construction times to streamline the loan origination process for you and your borrowers.
  • Enhanced niche-marketing opportunities to meet your borrowers' needs when you process many of our popular, low down payment mortgages as Renovation Mortgages.

Benefits for Your Borrowers

  • Mortgage options that meet your borrowers' needs. Offer the financing flexibilities your borrowers need when you combine renovation mortgages with many other Freddie Mac products, including low down payment mortgages.
  • A more flexible, streamlined loan origination process whether your borrower's Renovation Mortgage is a purchase or refinance transaction.

Get More Information

Training Opportunities

Visit The Learning Center for live and recorded web conferences, access to classroom-style workshops and self-study tools – all designed to help you stay competitive, serve more borrowers and make it easier to do business with us.

The information in this document is not a replacement or substitute for information found in the Single-Family Seller/Servicer Guide and/or the terms of your Master Agreement and/or Master Commitment.


© 2009 Freddie Mac