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.
- 1- to 2-unit primary residences
- 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).
- 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.
- 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
- 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.
- 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.
- 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.
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.
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
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.