Freddie Mac introduces new home loan options for challenged home-buyers: The new “Home Possible Mortgage” offers borrower education, delinquency counseling, zero and three percent down payment plans, and flexible credit requirements. These plans offer 100 or 97 percent loan-to-value mortgages for single family homes (and in some cases 3-4 unit properties) with no-cash-out refinancing. Borrowers can put down as little as $500 from personal funds for the purchase of a single-family home.
Home Possible Neighborhood Solution Mortgages offers these benefits plus special features designed to boost home-buying options for teachers, law enforcement officers, firefighter, and health care workers by up to 30 percent. This mortgage provides a three-year subsidy buy-down with a higher debt-to-income ratio, reducing the initial interst rate as much as one-and-a-half percent in the first year and half a percent over each of the next two years.
These loans are available through Freddie Mac’s national network of over 2,000 lenders and 10,000 mortgage brokers with Mac’s automated underwriting service “Loan Prospector.” These products are available for single-unit properties with 15-, 20-, and 30-year fixed rate mortgages or as 7/1 or 10/1 adjustable rate mortgages. All borrowers must complete a pre-purchase borrower education program, due to a study proven that these counseling programs significantly reduce mortgage delinquencies and help more borrowers succeed as long-term homeowners.
