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Construction Conversion Mortgages
Enhancing your opportunities to meet your borrowers' construction conversion financing needs

Related Products

Expand permanent financing opportunities for more of your borrowers with our Construction Conversion Mortgages for new site-built and manufactured homes – a component of our Mortgages for Newly Constructed Homes offering. Construction Conversion Mortgages offer you and your borrowers greater flexibility, including permitting 18 months between the date of the earliest credit, capacity or collateral document and the settlement date – allowing for longer construction times.

With Construction Conversion Mortgages, you can continue to take advantage of a variety of competitive sale execution options for the loans you process as purchase transactions. Plus, you can also sell to Freddie Mac the loans you process as no-cash out; and cash-out refinances (site-built only).

Product Features

Feature Requirements
Property Type
  • Newly built or constructed 1- to 4-unit site-built homes
  • Newly purchased 1unit manufactured homes that never have been attached to a foundation
  • Primary residence
  • Investment property
  • Second homes
Eligible Mortgage Products
  • 15-, 20-, 30- and 40-year fixed-rate mortgages
  • Most ARMs eligible for sale to Freddie Mac
  • 5- and 7-year balloon/reset mortgages (non-seasoned)
Transaction Type
  • Purchase
  • No cash-out refinances
  • Cash-out refinances (Site-built only)
Maximum LTV Ratios (without secondary financing)
  • Values used to determine LTV, TLTV, and HTLTV for Construction Conversion Mortgages are calculated according to the requirements in Section K33.12 of the Single-Family Seller/Servicer Guide.
Underwriting
  • Loan Prospector Mortgages
  • Non-Loan Prospector Mortgages
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
Special Delivery Requirements
  • Special characteristics codes must be delivered on Form 11 or 13SF as applicable: see Guide Section 17.38.1
  • D51 and D69 – Construction Conversion/Renovation Mortgages - Site-built
  • D52 – Construction Conversion Mortgages - Manufactured Home
  • D53 – Seasoned Mortgage for Newly Constructed Home
Single-Family Seller/Servicer Guide
  • Find complete details on requirements for Mortgages for Newly Constructed Homes in Guide Chapter K33.


Download a Construction Conversion Mortgage factsheet [PDF 188K] for more details.

Lender Benefits

  • Expanded options to drive more loan volume with Construction Conversion Mortgages available through the Single-Family Seller/Servicer Guide.
  • New flexibility that matches your borrowers' needs and assists in Gulf Coast rebuilding. You now have 18 months to  process, underwrite, document, allow for construction and sell all Construction Conversion Mortgages – allowing for longer construction times to streamline the loan origination process for you and your borrowers.
  • Enhanced niche-marketing opportunities to meet your borrowers' needs when you process 40-year fixed-rate mortgages and many of our other popular, low downpayment mortgages as Construction Conversion Mortgages.

Benefits for Your Borrowers

  • Mortgage options that meet your borrower's needs. Offer the financing flexibilities your borrowers need when you combine construction conversion mortgages with 40-year fixed-rate mortgages and many other Freddie Mac products, including low downpayment mortgages.
  • A more flexible, streamlined loan origination process whether your borrower's Construction Conversion Mortgage is a purchase or refinance transaction.

Get More Information

Training Opportunities

Visit The Learning Center for 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.


© 2008 Freddie Mac