7/2/2019 | Casey Fleming | How do you finance a fixer-upper? It recently became much easier and much less expensive. Let’s take a look:
On June 19th Freddie Mac announced their new CHOICERenovation © loan. This loan allows a home buyer to purchase a fixer-upper home and finance all repairs with a single, permanent loan. It can be used for existing homeowners who want to refinance and make repairs, too.
Benefits of the New Freddie Mac Loan
This isn’t the first program to do this, but it is much more flexible than previous programs. For example, the CHOICERenovation © loan allows for repairs or upgrades that address dangers from natural disasters, such as flood, wild fire and earthquakes.
The new program has a couple of substantial benefits for borrowers, too. In the past, home buyers had to rely on financing that was either more expensive or much more restrictive in terms of what repairs could and could not be financed. Existing home owners could finance home repairs, but had to use a cash-out mortgage, which is typically considerably more expensive than a rate / term refinance. The new loan program, therefore, offers benefits that were not available before.
Renovation Loans Were Badly Needed
“We recognized there was a significant amount of aging housing stock, both in underserved areas and the broader housing market…” Kelly Marocco, director of credit policy at Freddie Mac said.
The renovation market has exploded by 150% since 2009, Freddie Mac pointed out in their announcement. Nearly 80% of the nation’s homes are more than 20 years old, and 40% are at least 50 years old.
(They don’t build ‘em like they used to!)
Additionally, millennials and other first-time home buyers are looking for affordable ways to enter the housing market. The Freddie Mac CHOICERenovation © product can help make their dreams a reality by helping home buyers finance a fixer-upper as one option.
Discover More About Fixer-Upper Renovation Loans
For more information on this new product, contact your local mortgage broker and ask if it fits your circumstances.
Resources: Freddie Mac News Release
This article represents the opinions of Casey Fleming, and not necessarily those of C2 Financial Corp. This analysis was prepared with the best information available at the time it was written. Neither Casey Fleming, nor C2 Financial Corp., have any magical insider information about bond markets, real estate markets or mortgage markets that would make economic projections any more reliable than any other source. No warranty is made that the outcome will reflect the projections in this article, and neither Casey Fleming nor C2 Financial Corp. are responsible for decisions that you make regarding your own choices about your real estate or mortgage or those of your clients.
Fair use and redistribution
This article is copyrighted and may not be used or reprinted without permission. However, we encourage you and freely grant you permission to reuse, host, or repost this article and any images used therein, provided that when doing so, you attribute the authors by linking to LoanGuide.com or this page, so that your readers can learn more about this topic. Your link must be a “dofollow” link.
For any other use, please contact us at LoanGuide@Outlook.com