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Home Possible Neighborhood Solution Mortgages

Offers Flexible Credit Parameters for Community Workers

With Freddie Mac’s Home Possible Neighborhood Solution® Mortgages, you can offer your borrowers low down payment options and flexible credit terms.

What’s more, you have even greater flexibility to serve borrowers who work in your community – like teachers, firefighters, health care workers, law enforcement officers, and military personnel – so that they can live in the communities they support so well.

Product Features

Property Types
  • 1- to 2-unit primary residences
  • Condos
  • PUDs
  • Manufactured homes (with additional requirements)
Eligible Mortgage Products
  • Fixed-rate mortgages with an original maturity not greater than 30 years.
  • Adjustable-rate mortgages (ARMs) including 5/1 (2/2/5 caps), 7/1, and 10/1 nonconvertible ARMs with an original maturity not greater than 30 years on 1- to 2-unit primary residences.
  • Home Possible Mortgages with Rural Housing Service (RHS) Leveraged Seconds meeting the requirements of the Single-Family Seller/Servicer Guide (Guide) Chapter 35.
Maximum LTV/TLTV Ratios
  • Values used to determine LTV and TLTV for Home Possible Mortgages are calculated according to the requirements in Guide Section A34.10.
  • A borrower's credit reputation is acceptable if the Home Possible Mortgage receives a risk class of Accept.
  • If a Home Possible Mortgage does not receive a risk class of Accept, the mortgage may be eligible as a manually underwritten mortgage if Loan Prospector® returns:
    • An evaluation status of Incomplete.
    • A risk class of Caution, but the repository file used to create the selected borrower's credit report contains inaccurate credit information as specified in Guide Section 37.5 (c).
Down Payment Requirements
  • Minimum down payment:
    • 1- to 2-unit primary residences: 5 percent of value
    • Manufactured homes: 5 percent of value
Homebuyer Education
  • Homeownership education is required before the note date for at least one qualifying borrower if all borrower(s) are first-time homebuyers.
  • Homeownership education must be provided by a party not involved in the sale or financing of the property; if provided by the originating lender or by the Seller, the homeownership education must be conducted by someone not directly involved in the loan origination, processing, or approval process.
  • A copy of Exhibit 20, Homeownership Education Certification, or another document containing comparable information must be retained in the mortgage file. The following types of homeownership education are acceptable:
    • Internet-based homeownership education programs that have been developed by mortgage insurance companies.
    • Homeownership education programs that meet the standards of the National Industry for Homeownership Education and Counseling.
    • Programs using the Freddie Mac CreditSmart® financial education curriculum, provided modules 1, 2, 7, 11 and 12 are included.
Execution Options
  • Servicing-Released Cash
  • Servicing-Retained Cash
  • WAC ARM Cash
  • Fixed-Rate Guarantor
  • WAC ARM Guarantor
  • MultiLender Swap

Use Freddie Mac's selling system for easy secondary market sale.

Delivery Fees
  • Special postsettlement delivery fees are applicable to Home Possible Neighborhood Solution Mortgages. See Guide Exhibit 19 for more details.
Special Delivery Requirements
  • See Guide Section 17.18(b) for special delivery instructions for Home Possible Mortgages.
Single-Family Seller/Servicer Guide
  • Refer to Guide Chapter A34.

Download a Home Possible Neighborhood Solution Mortgage fact sheet for more details.

Lender Benefits

Home Possible Neighborhood Solution Mortgages help you:

  • Expand your borrower base and tap new markets such as low-and moderate-income borrowers, first-time homebuyers, new immigrants, and underserved communities.
  • Leverage a continuing, competitive, and affordable option, with high-LTV lending for borrowers with strong credit.
  • Enhance your Community Reinvestment Act (CRA)-eligible originations.

Borrower Benefits

Home Possible  Neighborhood Solution Mortgages provide your borrowers with:

  • Stable monthly mortgage payments for fixed-rate mortgages
  • Flexible closing cost funding options
  • Reduced mortgage insurance coverage levels
  • No cash-out refinancing

For More Information

Training Opportunities

Visit The Learning Center for live and recorded web conferences, access to classroom-style workshops and self-study tools – all designed to help you stay competitive, serve more borrowers and make it easier to do business with us.

The information in this document is not a replacement or substitute for information found in the Single-Family Seller/Servicer Guide and/or the terms of your Master Agreement and/or Master Commitment.

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