Effective next month, Freddie Mac will stretch the period lenders have to originate, document, and sell construction-to-permanent mortgages to the secondary-market company from six to 18 months.The longer time frame will remove separate time lines for origination, construction, and sales of loans financing either new construction or renovations, allowing for a more streamlined process. The change is intended to give lenders and their clients more time and flexibility to accommodate unexpected changes in construction scheduling, and should be particularly helpful in giving move-up buyers more time to sell their homes in the slowing real estate market. It should also help thousands of Gulf Coast borrowers waiting for grants or insurance proceeds to commence repairing their storm-damaged homes or experiencing construction delays. The pending changes make it clear that Freddie Mac is financing only the permanent "takeout" mortgage and not loans for land acquisition, development, or construction.

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