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Fannie Mae and Freddie Mac unveiled new rules for mortgages that will help in reducing homeowners insurance bills for millions in American families, especially in condos and rural areas, the Federal Housing Finance Agency (FHFA) said in a March 18 statement.
According to the agency, which is responsible for the overall management of Fannie Mae and Freddie Mac, a key change relates to Actual Cash Value (ACV) and Replacement Cost Value (RCV) coverage for homes.
An ACV policy pays for the cost of repair or replacement of part or whole of a homeowner’s property, accounting for depreciation of the asset. In contrast, an RCV policy pays the full repair amount using materials of similar quality and kind, without considering depreciation….
According to the agency, which is responsible for the overall management of Fannie Mae and Freddie Mac, a key change relates to Actual Cash Value (ACV) and Replacement Cost Value (RCV) coverage for homes.
An ACV policy pays for the cost of repair or replacement of part or whole of a homeowner’s property, accounting for depreciation of the asset. In contrast, an RCV policy pays the full repair amount using materials of similar quality and kind, without considering depreciation….
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