Freddie Mac Single-Family Seller/Servicer Guide 4607.4 — General eligibility requirements for CHOICERenovation® Mortgages

Freddie Mac Single-Family Seller/Servicer Guide 4607.4 — General eligibility requirements for CHOICERenovation® Mortgages

Effective 2025-02-05 · Freddie Mac's stamp for this section

This section contains requirements related to: ■ Completion Date and Settlement Date requirements ■ Mortgage purpose ■ Maximum loan-to-value (LTV)/total LTV (TLTV)/Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratios ■ Determining value ■ Secondary financing (a) Completion Date and Settlement Date requirements (i) Completion Date requirements Renovations to the Mortgaged Premises must be completed by the Completion Date as follows: ■ 450 days after the Note Date for CHOICERenovation® Mortgages that are not CHOICEReno eXPress® Mortgages ■ 180 days after the Note Date for CHOICEReno eXPress Mortgages (ii) Completion Date extension The Seller may request from Freddie Mac a Completion Date extension when circumstances outside the Borrower’s or contractor’s control prevent completion of the renovations by the Completion Date. The total days requested for the extension(s) must not exceed 90 days. To be eligible for a Completion Date extension, the Borrower must not: ■ Be delinquent at the time of the Seller’s extension request, and ■ Have been 30 days delinquent more than once during the renovation period To request a Completion Date extension, the Seller must submit to Loan Status Hub® documentation supporting the reason for the delay (e.g., weather, supply chain issues, permit delays, etc.). If Freddie Mac grants the extension, the Completion Date may be extended: ■ A maximum of 90 days for CHOICERenovation Mortgages ■ A maximum of 30 days for CHOICEReno eXPress Mortgages If the extension request is granted, Freddie Mac will provide the extended Completion Date through Loan Status Hub. (iii)Settlement Date requirements For CHOICERenovation Mortgages with Settlement Dates after completion of renovations (see Section 4607.1(a)), the Settlement Date must occur no more than 450 days after the Note Date. (b) Mortgage purpose CHOICERenovation Mortgages must be either purchase transaction or “no cash-out” refinance Mortgages with proceeds used as follows: ■ Purchase transaction Mortgages: Proceeds may be used to purchase the Mortgaged Premises and to pay for the eligible renovations described in Section 4607.6 ■ “No cash-out” refinance Mortgages: Proceeds may be used as described in Section 4301.4, except that proceeds may not be used to disburse cash out to the Borrower. A CHOICERenovation Mortgage secured by a property previously owned free and clear by the Borrower is considered a “no cash-out” refinance Mortgage if the proceeds are used only to finance the eligible renovations described in Section 4607.6. At least one Borrower must have been on the title to the subject property for at least six months prior to the Note Date unless one of the exceptions to this title requirement that are specified in the cash-out refinance Mortgage requirements of Section 4301.5(b) applies. (c) Maximum LTV/TLTV/HTLTV ratios Each CHOICERenovation Mortgage must have maximum LTV/TLTV/HTLTV ratios that comply with the LTV/TLTV/HTLTV ratios in Section 4203.1(b) and any other applicable LTV/TLTV/HTLTV ratio requirement for the specific Mortgage Product or offering. (d) Determining value The value used to determine the LTV, TLTV and HTLTV ratios must be established as follows: Purchase transaction “No cash-out” refinance Value is the lesser of: ■ The purchase price of the Mortgaged Premises prior to the renovations plus the total renovation costs, or ■ Appraised value of the Mortgaged Premises, as completed Value is the appraised value of the Mortgaged Premises, as completed. (e) Secondary financing Secondary financing must comply with Guide requirements for the specific Mortgage Product or offering.

Source: Freddie Mac Single-Family Seller/Servicer Guide 4607.4 — General eligibility requirements for CHOICERenovation® Mortgages · source URL · snapshot 4c94f67729042dd6