Freddie Mac’s new renovation loan
Freddie Mac’s CHOICEReno eXpress program can provide much–needed cash if you’re buying or refinancing a home in need of improvements.
This one–time–close loan funds your mortgage and home improvements all with a single loan. That means just one set of paperwork, one closing, and one set of closing costs.
Like other one–time–close home improvement loans, CHOICEReno eXpress can save time and money for people who want to finance renovations on a new or existing home.
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What is the CHOICEReno eXpress renovation loan?
Home renovations can update a property to your style and liking. And some projects will even increase your home’s value. But renovations can be costly.
Freddie Mac’s CHOICEReno eXpress is designed for small–scale projects, and it works by combining home financing with a renovation loan. So rather than getting separate financing to cover home projects, you can get an all–in–one, single–close loan.
This streamlined renovation loan program is an alternative to using your personal savings, a credit card, or your home’s equity to finance home projects.
Keep in mind, though, this program isn’t for newly constructed properties. And it’s limited to certain types of loans and units.
Freddie Mac’s CHOICEReno eXpress differs from construction loans because you’re allowed to advance a contractor or home improvement store 100% of the cost of materials once you receive funds. However, you must provide an estimate from a home improvement store or licensed contractor.
The good news, though, is that you’re allowed to complete home improvement projects yourself if you’re a licensed contractor. But the program doesn’t allow payment to yourself for labor.
What renovations can you do with Freddie’s Mac CHOICEReno eXpress?
Freddie Mac’s new renovation loan program allows financing of small–scale cosmetic improvements, such as:
- Minor interior and exterior remodeling
- Interior and exterior painting
- New windows and doors
- Purchase of energy–efficient appliances
- Repair or replace your roof
You can get mortgage financing, as well as an additional 10% of the property’s value for improvements (or 15% in a high–need community).
To illustrate, let’s say you’re buying a $300,000 house with a 5% down payment of $15,000. Since you can get 10% of the property’s as–completed value, under this program you might receive up to $30,000 for home improvement projects.
Freddie Mac CHOICEReno eXpress loan requirements
In addition to using the CHOICEReno eXpress loan for small–scale projects, you can only use this program with certain mortgage products.
It’s available with Freddie Mac fixed–rate and adjustable–rate mortgages, such as Freddie Mac Home Possible mortgages, Freddie Mac HomeOne mortgages, Freddie Mac HFA Advantage mortgages, and super conforming mortgages.
Properties eligible for the Freddie Mac CHOICEReno eXpress loan include:
- 1–4–unit primary residences
- 1–unit second homes
- 1–unit investment properties
- Manufactured homes
Keep in mind, the program’s maximum loan–to–value (LTV) depends on …….
Source: https://themortgagereports.com/86233/freddie-mac-choicereno-express-program