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Home Possible Neighborhood Solution Mortgages

Offers Flexible Credit Parameters for Community Workers

Important Notice

Effective for mortgages with Application Received Dates on or after January 10, 2014, mortgages with an original maturity in excess of 30 years are not eligible for sale to Freddie Mac, as announced in Single-Family Seller/Servicer Guide Bulletin 2013-16. Sellers may continue to deliver these mortgages provided that they have Freddie Mac Settlement Dates on or before
July 31, 2014.

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

FeatureRequirements
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; 40 years on 1-unit primary residences (See notice above).
  • Adjustable-rate mortgages (ARMs) including 5/1 (2/2/5 caps), 7/1, and 10/1 nonconvertible ARMs with an original maturity 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.
Eligibility/Underwriting
  • 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.

© 2013 Freddie Mac

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