Freddie Mac CHOICERenovation Mortgage Guidelines


This ARTICLE On Freddie Mac CHOICERenovation Mortgage Guidelines Was PUBLISHED On August 14th, 2019

What are Freddie Mac CHOICERenovation Mortgage Guidelines

Gustan Cho Associates have news to bring our clients regarding renovation lending.

  • Renovation lending is becoming more and more popular as many families want to stay in the homes they live in
  • Freddie Mac has reentered the renovation lending realm
  • They have released a new loan product called the Freddie Mac CHOICERenovation Mortgage
  • Freddie Mac CHOICERenovation Works for both purchasing and refinancing a property
  • In this blog, we will detail the program highlights and specific qualifications
  • Gustan Cho Associates are experts in renovation lending
  • We have offered FANNIE MAE HOMESTYLE and FHA 203 K renovation mortgages for years now
  • We are excited to now offer CHOICERenovation!

In this article, we will cover and discuss the Freddie Mac CHOICERenovation Mortgage Guidelines.

What Does Renovation Lending Mean? 

What Does Renovation Lending Mean? 

Renovation lending means you can complete home renovations as part of a mortgage loan.

  • These loan products work for both home purchases or a refinance
  • This is a great opportunity for you to make your current home your dream home or make the home you’re buying perfect fit for your family
  • There are endless possibilities to the renovations you can complete
  • This is a full-proof way to add value to your property
  • Let’s face it, the majority of Americans do not have a slush fund laying around they can use for home renovations
  • That is where a renovation lending comes in the place
  • We have seen some minor renovations all the way up to adding an entire level to a property
  • That’s right we have seen a client make their one-story home into a two-story home with the renovation refinance!
  • Just because your family sizes growing does not mean you need to sell your home and buy a new one

Reach out to Mike Gracz on 630-659-7644 for specifics on what a renovation loan can do for you and your family.

More Information On Freddie Mac’s CHOICERenovation

what is this Freddie Mac’s CHOICERenovation

Freddie Mac announced this program to help address the gap in the market for lenders looking for other Conventional Renovation loan options AND providing a cost-effective solution for borrowers.

  • Freddie Mac CHOICERenovation was designed for convenience and cost-saving options financing home purchases and renovation costs into a single closing transaction
  • Also designed for current homeowners who need to make improvements or repairs to their existing property
  • Since this program includes renovation costs into a mortgage, this will help assist with the aging housing supply
  • Renovating older homes with today’s modern upgrades add value to a neighborhood
  • Freddie Mac sees the value in upgrading American neighborhoods

In a recent Harvard study, it is estimated that 80% of the nation’s 137 million homes are at least 20 years old, and 40% are over 50 years old. This is a great time to modernize older homes!

Freddie Mac CHOICERenovation Qualifications And Guidelines

what are the Freddie Mac CHOICERenovation Qualifications And Guidelines

CHOICERenovation is available in both fixed-rate and adjustable-rate programs. This product can also be combined with other Freddie Mac products such as FREDDIE MAC HOME POSSIBLE, FREDDIE MAC HOMEONE, and FREDDIE MAC SUPER CONFORMING.

Eligible property types: 

  • 1-4 Unit primary homes
  • Manufactured homes
  • 1-unit second homes
  • 1-unit investment properties
  • PUD’s or Planned Unit Developments
  • Condominiums

Maximum Loan-To-Value Ratios:

  • 1-Unit primary homes – 95%
  • 1-Unit primary homes – 97% for first time home buyers (HomeOne and HomePossible)
  • 2-Unit Primary – 85%
    3-4 -Unit Primary – 80%
    1-Unit second home – 90%
  • 1-unit investment property – 85%
  • Manufactured homes – 90%

ALL LTV’s above 80% will have MORTGAGE INSURANCE

ALL LTV’s above 80% will have MORTGAGE INSURANCE

Max debt-to-income (DTI):
  • Per AUS – MAX up to 50%


  • Freddie Mac CHOICERenovation does NOT allow manual underwriting. Must have an automated AUS approval. Please see our AUS BLOG for more information

CHOICERenovation is a single close mortgage loan. Unlike a true construction loan, the borrower does not need to re-qualify after the renovations are completed. This allows buyers to renovate a home with a low-down payment and not worry about re-qualifying once the renovations are completed.

Is there a maximum renovation limit?

The short answer is yes. The max renovations costs can only be 75% of the “as-completed” appraised value.

  • For a refinance, that is cut and dry, 75% of the “as-completed” appraised value.
  • For purchases, that amount is the LESSER of 1) the sum of the purchase price PLUS the renovations costs OR 2) the “as-completed” appraised value after the improvements

Example provided

When Do The Renovations Start? 

When Do The Renovations Start? 

After closing on your mortgage, the renovations will start as soon as possible.

  • All Renovations bust be completed within 365 days
  • If the renovations will take longer than one year, it is the lender’s responsibility to keep Freddie Mac up-to-date

Freddie Mac May issue an extension but we’ll need a detailed explanation of why the renovations are running behind schedule.

Qualify Today With A Direct Lender With No Overlays

How Qualify Today With A Direct Lender With No Overlays

As stated above, Gustan Cho Associates at Loan Cabin are experts in renovation lending. Our staff has completed numerous renovation mortgages, so we know the process. There are a lot of moving parts with the renovation loan and it is important to pick a team with the support you will need. A lot of these items are out of your control, from permits to contractors, to weather delays, there are a lot of moving parts. Please email Mike Gracz at or call 630-659-7644 with any questions. We are available seven days a week!

Not sure if you can use this video from Freddie Mac’s site

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