Homeowners can borrow up to 10 percent of home’s as-completed value.

Freddie Mac has announced a new single-close mortgage product that will allow homeowners to finance the cost of small-scale renovations. The CHOICEReno eXPress will allow homebuyers to make cosmetic renovations, such as replacing windows and doors, roof repairs, minor remodeling and interior or exterior painting. The new product is an expansion of the existing Freddie Mac CHOICERenovation mortgages. The new loans will offer homebuyers and homeowners more affordable loan terms than using credit cards or unsecured financing when making small-scale renovations. Lenders can sell the new mortgages to Freddie Mac when the loan proceeds are used to pay for renovations of up to 10 percent of the home's as-completed value (up to 15 percent in rural regions with high needs classification) without requiring special lender pre-approval or lender recourse depending on the purchase price. A completed inspection is required to verify that the planned renovations were in fact done. According to Danny Gardner, senior vice president of client and community engagement for Freddie Mac's Single-Family business, the streamlined loan requirements will be beneficial to lenders who want to provide a renovation option to their clients but have limited experience in renovation and construction lending.

Source: Mortgage News Daily