Are you looking to add value to your property, to create a separate place for your guests, or maybe generate extra income? It’s now easier than ever to get financing for these home improvements, which are considered Accessory Dwelling Units (ADUs) in the mortgage world.
Whether you are a current homeowner or looking to purchase your first home, an Accessory Dwelling Unit (ADU) might be a good investment for you. In this article, we look at how getting a loan for an ADU just got easier and what you need to know about Freddie Mac’s recent policy changes.
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ADUs provide many benefits for homeowners. ADUs are second, smaller dwelling units that can serve a variety of purposes including a repurposed attic, basement apartment, granny flats or a new addition entirely. With the growing popularity of Accessory Dwelling Units, Freddie Mac policies are now offering more flexibility and options for adding an ADU to a home or financing a purchase when you propose to rent or build an ADU. ADUs are in increasing demand as a creative solution for sustainable homeownership.
Freddie Mac (The Federal Home Loan Mortgage Corporation) was created by Congress in 1970 to keep money flowing to mortgage lenders regarding homeownership and rental housing. Freddie Mac does not make loans directly to homebuyers. Instead, Freddie Mac purchases loans from lenders so that they can replenish their supply of funds so that there can be more mortgage loans to other borrowers which may include banks, credit unions, and other lenders.
Freddie Mac’s changes make it easier for homeowners to get loans to support current and future ADU developments. These changes include:
Accessory Dwelling Units are increasing in popularity within the housing market. Expanding policies on ADUs are designed to help tackle housing shortages and access to credit. With easier access to these loans, homeowners are experiencing many benefits of these additional units. As a major purchaser of home mortgages, Freddie Mac is taking a giant leap forward to help secure homes with ADUs as well as loosening borrower qualification terms.
Mortgage lending can be complicated and confusing, especially when there are new policies in place (even if they make things easier for you). If you need help deciding if an ADU is right for you, contact the Mortgage 1 team today with any questions you may have! Get started by calling 1-866-532-0550 today.