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Flexible Financing and Innovative Features with CHOICEHome

December 6, 2018

Wouldn’t it be great to utilize more of our credit and collateral flexibilities with manufactured home borrowers? With our Freddie Mac CHOICEHome℠ pilot program, we’re paving the way to do just that.

What’s CHOICEHome?

CHOICEHome is a new type of manufactured home defined by higher pitch roof lines; permanent foundations; dry wall throughout; energy-efficient features; and site-built components, such as a garage or carport.

During this pilot, we’ll permit a loan-to-value ratio of up to 97 percent with a Home Possible® and HomeOne℠ mortgage, and our construction conversion loans to finance a CHOICEHome. And, we’ll test the loan origination process to determine what valuable financing terms we can bring to market. If a manufactured home meets certain CHOICEHome specifications, it is granted CHOICEHome certification and is eligible for CHOICEHome financing. And, in appraising these homes, we’ll permit the use of site-built homes as comparable sales when there are no CHOICEHome sales available.

The Power of the Pilot

Our CHOICEHome pilot is a part of our larger strategy to support manufactured housing. We didn’t develop CHOICEHome in a vacuum. It’s the result of extensive collaboration with many industry stakeholders, including lenders, multiple manufacturers, retailers, mortgage insurers and appraisers. It dovetails with our Duty to Serve mission to serve the overall manufactured housing market by expanding our reach to families with moderate incomes, which complements our current support for borrowers with low and very low incomes.

Our CHOICEHome pilot will help:

  • Provide additional financing options and flexibilities. We’ll treat loans secured by a CHOICEHome like those secured by single-family site-built homes. Lenders can finance a CHOICEHome using most of our conventional loan offerings, including construction conversion mortgages, Home Possible® and HomeOne℠.
  • Increase borrower options and access to quality, affordable homes. Borrowers are finding it difficult to buy a home due to the affordable housing shortage. But with more than 22 million families experiencing homeownership thanks to manufactured housing, and with that number expected to grow, there’s an opportunity for manufactured homes to meet borrowers’ needs.
  • Increase the reputational value of manufactured homes. Negative stereotypes and myths about aesthetic appeal, quality and safety pose a major challenge for this market. With its modern, innovative, high-quality features and construction, CHOICEHome will help to improve the perception of manufactured homes.

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