If you’re planning to purchase or refinance a home and want to finance improvements at the same time, the CHOICERenovation loan 2025 may be your best option. Backed by Freddie Mac, this renovation loan combines rehab costs and mortgage financing into one streamlined solution.

Here’s everything you need to know about the CHOICERenovation loan 2025, including borrower eligibility, LTV limits, consultant rules, and which renovations qualify.

CHOICERenovation Loan 2025: Maximum LTV & Property Types

  • 1-unit primary residence:
    • 97% LTV (HomeOne)
    • 95% LTV (standard)
  • 2-unit primary residence: 95%
  • 3–4 unit primary residence: 80%
  • Second home (1-unit): 90%
  • Investment property (1-unit): 85%

LTV for purchases is calculated using the lesser of the “as completed” value or the sum of purchase price plus renovation costs. For refinances, it’s based on the “as completed” value alone.

Eligible Properties and Borrowers

The CHOICERenovation loan 2025 can be used on:

  • 1–4 unit primary residences
  • One-unit second homes
  • One-unit investment properties
  • PUDs and condos (condo renos must be interior and HOA-approved)

Borrower Eligibility:

  • Must be an individual (no LLCs, trusts, etc.)
  • Must not be related to or employed by the contractor
  • Loans must receive an “Accept” from Freddie Mac’s LPA (manual underwrites are not allowed)

CHOICERenovation Loan 2025: Approved Renovations

Most home improvements are eligible, including:

  • Moving a home to a new site or foundation
  • Demolishing and rebuilding a structure
  • Foundation replacement
  • Structural repairs and reconfigurations
  • Cosmetic upgrades
  • Final non-structural work on a new home

All work must be completed within 12 months. The maximum renovation cost cannot exceed 75% of the as-completed value.

Contractor & Consultant Guidelines

Contractor Requirements:

  • Borrowers choose their own contractor
  • Contractors affiliated with the originating broker are not allowed
  • Contractors must provide:
    • Acceptance form
    • W-9
    • Liability insurance
    • License (if required by state)
    • References or supplier/customer contact info

Consultant Requirements:

A HUD-approved Renovation Consultant is required when:

  • The renovation includes structural work, or
  • The contractor has no experience with renovation loans

CHOICERenovation Loan 2025: Appraisals, Draws & Escrows

Appraisals:

  • Must reflect the “as completed” value
  • Transferred appraisals are not allowed

Draws:

  • Up to five draw requests are allowed, including the final disbursement
  • A 10% contingency reserve is required on all projects

Financed Mortgage Payments:

Borrowers who cannot occupy the property during renovations may escrow up to 6 months of payments on primary residences (except in HOA-governed properties).

Mortgage Insurance, Gift Funds & Escrow

  • Mortgage Insurance: Required for LTVs above 80%; single premium MI may not be financed
  • Gift Funds: Allowed per standard Freddie Mac rules (gifts of equity not permitted)
  • Escrow Waivers: Allowed, unless mortgage payments are being financed

Why Consider the CHOICERenovation Loan in 2025?

The CHOICERenovation loan 2025 is ideal for homebuyers or owners seeking a flexible, all-in-one renovation loan. Whether you’re upgrading a primary home, adding value to an investment property, or rebuilding from the ground up, CHOICERenovation gives you the financing structure to get it done—all while building equity faster.

At North Star Mortgage Network, we help clients take advantage of CHOICERenovation and other renovation financing options to improve their homes and financial futures.

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