Mortgages for Newly Constructed Homes
For your borrowers seeking permanent financing for newly constructed homes, look to our Mortgages for Newly Constructed Homes offering which provides permanent financing opportunities for newly built homes, construction conversions and renovations.
Take advantage of the assessment capabilities of Loan Prospector® when originating and underwriting Mortgages for Newly Constructed Homes, and choose from a full set of competitive secondary market options when delivering loans to Freddie Mac.
Product Features
| Feature |
Description |
| Property Type |
- 1- to 4-unit site built homes
- 1-unit manufactured homes (Newly Built Home Mortgages and Construction Conversion Mortgages only.)
- Primary residence
- Investment property
- Second homes
|
| Eligible Mortgage Products |
- 15-, 20- and 30-year fixed-rate mortgages
- Most ARMs eligible for sale to Freddie Mac
- Super conforming mortgages with applications dated on or after June 13, 2010
- 5- and 7-year balloon/reset mortgages (non-seasoned)
- Home Possible Mortgages® (Newly Built Home Mortgages – Site-built only; non-seasoned)
|
| Transaction Type |
- Purchase
- No cash-out refinance (Construction Conversion and Renovation Mortgages)
- Cash-out refinance (Construction Conversion and Renovation Mortgages (site built only)
- If mortgage proceeds are used to replace an Interim Construction Financing, the transaction must meet the requirements of the Single-Family Seller/Servicer Guide (Guide) Chapter K33
|
| Maximum LTV Ratios (without secondary financing) |
- Values used to determine LTV, TLTV, and HTLTV for Mortgages for Newly Constructed Homes are calculated according to the requirements in Chapter K33.12 of the Guide
|
| Underwriting |
- Loan Prospector Mortgages
- Non-Loan Prospector Mortgages
- Effective for mortgages with application dates on or after June 13, 2010, and settlement dates on or after January 1, 2011:
- A borrower’s credit and capacity documentation must be dated no more than 120 days prior to the effective date of permanent financing
- If the settlement date is more than 120 days after the effective date of permanent financing, the Seller must obtain a new appraisal with at least an exterior-only inspection that meets Freddie Mac’s requirements
- All mortgages must meet the risk class and/or minimum Indicator Score requirements in Exhibit 25A, where applicable
|
| Execution Options |
- Servicing-released Cash
- Servicing-retained Cash
- Fixed-rate Guarantor
- WAC ARM Guarantor
- Mortgages for Newly Constructed Homes with a settlement date more 12 months after the effective date of permanent financing are not eligible for sale under MultiLender Swap
|
| Delivery Fees |
- See Guide Exhibit 19 for details on applicable delivery fees.
|
| Special Delivery Requirements |
- Mortgages with application dates prior to June 13, 2010, originated under the 18-month age of documentation requirement must be delivered no later than December 31, 2010
- Special characteristics codes must be delivered on Form 11 or 13SF as applicable: see Guide Section 17.38.1
- D49 – Newly Built Home Mortgages – Site built
- D50 – Newly Built Home Mortgages – Manufactured Home
- D51 – Construction Conversion Mortgages – Site built
- D51 and D69 – Renovation Mortgages – Site built (both SCCs must be delivered)
- D52 – Construction Conversion Mortgages – Manufactured Home
- Reference Code: 0013 (delivered with Construction Conversion/Renovation Mortgages when data must be entered into the mod/conv field)
|
| Single-Family Seller/Servicer Guide |
- Find complete details on requirements for Mortgages for Newly Constructed Homes in Guide Chapter K33.
|
Download a Mortgages for Newly Constructed Homes factsheet.
Lender Benefits
- Options to drive more loan volume with newly built, construction conversion and renovation mortgages, all available through the Single-Family Seller/Servicer Guide.
- Enhanced niche-marketing opportunities to meet your borrowers' needs when combined with a variety of other Freddie Mac mortgages.
Benefits for Your Borrowers
- Options for offering permanent financing when your borrowers purchase or refinance a newly constructed site built or manufactured home, including renovations to their existing site built homes.
- Flexibility that matches borrowers' needs. Our requirements for eligible borrowers on Construction Conversion and Renovation Mortgages allow the removal of a co-borrower, or the addition of a related person to the permanent financing under specific circumstances.
Get More Information
Training Opportunities
Visit The Learning Center for Mortgages for Newly Constructed Homes training resources. You can get information on live and recorded web conferences, access to classroom-style workshops and self-study tools – all designed to help you stay competitive, serve more borrowers and make it easier to do business with us.
The information in this document is not a replacement or substitute for information found in the Single-Family Seller/Servicer Guide and/or the terms of your Master Agreement and/or Master Commitment.
