June 1 2024 Mortgage Changes for Home Insurance

Replacement over ACV

Heads up, everyone! There's a new twist in the home insurance saga that could affect your journey to homeownership! Fannie Mae and Freddie Mac have made a move effective June 1st 2024:

"In addition to actual cash value coverage being unacceptable, policies that limit, depreciate, reduce or otherwise settle losses at anything other than a replacement cost basis are also not acceptable."

But here's where it gets interesting for our future homeowners and the heroes guiding them (yes, I'm talking about you, realtors and lenders! A lot of insurers are now opting for Actual Cash Value (ACV) coverage for roofs, especially those more than a few years old.

Why does this matter? Well, if you're in the process of buying a home and the policy you choose only covers the ACV of your roof, it might just be the rain on your parade that could halt your loan from closing.

This is super important for our homebuyers to know and their real estate team to ensure they're fully informed. A stitch in time saves nine, right? Let's make sure our clients' dreams of homeownership don't get blown away by an outdated roof!

For my realtor and lender friends, let’s join forces to ensure our clients make the best insurance choices, keeping their loans safe and their futures secure. And remember, we're here to help navigate these choppy insurance waters with you.