On Home Possible® Freddie Mac CHOICERenovation®, rehab dollars sit in escrow after closing and release to contractors across five draws plus a final 1004D inspection — with a 10% holdback, up to 50% material advance on the initial draw, and contingency reserves that protect your primary-residence project.
Four stages from closing to final inspection — payments follow verified progress on your 1-unit primary.
01
Purchase or no-cash-out refinance closes. Renovation funds, contingency, draw admin fees, and inspection fees are held — not wired to your personal account as free cash.
02
One general contractor (plus specialty trades) starts against the approved bid package. Permits and materials move per the project plan.
03
When a milestone is done, a draw request triggers inspection. Approved amounts pay the contractor with a 10% holdback until completion.
04
Final 1004D inspection clears remaining escrow. Unused contingency may be applied to principal; cash-paid contingency may be reimbursed.
Paying contractors only after verified progress reduces the risk of unfinished work or funds diverted to unrelated expenses. It also keeps the after-improved appraisal honest — the lender financed a specific finished condition on a Home Possible primary residence.
Expect holdbacks on incomplete items and documentation that matches invoices to the original bid. Change orders need lender approval before extra dollars leave escrow. Repair costs must still fit the 75% purchase cap (or manufactured-home limits).
Ryan and Steve walk you through the draw calendar — five draws plus final 1004D, 10% holdback, up to 50% material advance, and a 15-month completion window — so contractors, inspectors, and your deadline stay aligned.
Core repair costs from approved contractor bids.
Soft costs that support plans and permits.
Five draw inspections plus final 1004D.
Fees required to keep the project legal and clear.
10% min · 15% if utilities off · 20% max.
Up to 6 months when the home is uninhabitable.
Related guides for contractors, DIY limits, and what soft costs roll into the escrow.
One GC, specialty trades, and AK/CA/HI/NY consultants.
Why escrow payments go to licensed contractors only.
Purchase-plus-rehab from closing through final draw.
What soft costs and contingency roll into escrow.
Bid packages and draw-ready scopes underwriters need.
Full guidelines, calculator, and all 20 guides.
No. Eligible Home Possible® Freddie Mac CHOICERenovation® rehab funds sit in escrow after closing. Contractors are paid as inspections confirm progress against approved bids — not as a single check to you on day one.
Five draws plus a final 1004D inspection. There is a 10% holdback until work is complete, and up to 50% of materials may be advanced on the initial draw. The draw administration fee is the greater of 1.5% of repair costs or $500.
Minimum 10% of repair costs (15% if utilities are off; 20% maximum). Unused contingency may be applied to principal; cash-paid contingency may be reimbursed once work is complete and final inspection clears.
All financed renovations must be completed within 15 months after closing. Ryan and Steve map the five-draw calendar against your contractor’s schedule before you close.
Ryan & Steve will map five draws, holdbacks, contingency, and your 15-month completion window around your Home Possible Freddie Mac CHOICERenovation® contractor schedule.
Home Possible and Freddie Mac CHOICERenovation® are registered trademarks of Freddie Mac. All loans are subject to credit and property approval. Program guidelines, income limits, LTV limits, and pricing are subject to change without notice and may not be available in all areas. This website is not affiliated with or endorsed by Freddie Mac, Fannie Mae, HUD, or any government agency. Information is for educational purposes only and is not a commitment to lend.