Mortgage giant responds to consumer demand with new product
Freddie Mac has unveiled a new mortgage product that will enable homebuyers and homeowners to pay for small-scale home renovations through their mortgage purchase or refinance.
The mortgage giant claims that the flagship product, CHOICEReno eXPress mortgage, will save homebuyers and homeowners both time and money, as the single-close loan has no extra fees and interest rates are on par with current low mortgage rates. CHOICEReno eXPress is closed in a traditional mortgage and consolidated in one monthly payment.
“CHOICEReno eXPress expands upon the Freddie Mac CHOICERenovation mortgages, which were designed to help address the nation’s aging housing supply, support the need for affordable housing, and offer renovation, repair, improvement, or refinance options to support the increasing demand for cost-effective financing solutions,” said 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.”
Depending on the loan’s purchase price, lenders can sell CHOICEReno eXPress 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) without requiring special lender pre-approval or lender recourse. Freddie Mac also requires a completed inspection of the home to ensure that the funds went to the planned renovation.
“Lenders with an interest in providing a renovation mortgage to their clients, but have limited experience in renovation and construction lending, will also find CHOICEReno eXPress is an attractive offering because of its streamlined operational requirements,” Gardner said.
The CHOICERenovation updates and the new CHOICEReno eXPress will be available for mortgages with settlement dates on and after November 01 this year, according to Freddie’s Press release.