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October 23, 2017

Learn Before Launch

Mike Dawson
Mike Dawson, VP Single-Family Affordable Lending Strategies & Initiatives

At Freddie Mac, we're creating a better company and a better housing finance system. To meet those twin goals, we continually innovate and engage in smart risk taking. How do we do that? One important way is through pilot programs.

As the U.S. population ages and becomes more diverse, borrowers' needs and expectations are changing. That's why, across our company, we're looking at things differently to find solutions that will benefit our industry, our neighborhoods, and our country for decades to come.

Single-Family's Approach to Pilots

Our pilots must address an unmet need, deepen our involvement in a key market segment, and support our mission to improve liquidity, stability and affordability in the housing market. Many pilots also support our broader community mission, which includes stabilizing communities, preventing foreclosures, responsibly expanding credit, educating homebuyers, and counseling homeowners.

Our aim is to use what we learn and apply the capability more broadly. The insights we gain factor into future efforts.

Two exciting new pilots are EarnUp and Next Step.


Our newest pilot is a collaboration with EarnUp, an innovative financial technology company that helps people pay down their debts and improve their financial health using one, easy-to-use platform. Several thousand consumers will use EarnUp for free for a year, working through certain HUD-approved housing counseling agencies.

EarnUp's secure platform offers the consumer personalized recommendations on how to pay down debts. It also automatically withdraws money from the individual's account on payday and pays the bills, breaking down expenses into manageable payments to ensure that the consumer stays current on loans and avoids late fees. Unlike other debt management platforms, EarnUp helps in paying off installment loans, such as auto loans, student loans, and even rent. And it can encourage the consumer to build savings when possible.

The technology will help people – especially low- and moderate-income earners – better manage their finances, improve their credit, and save money, including on late-payment fees. This is important in any case. It also can boost many people's chances of eventually becoming homeowners.

Next Step

Our partnership with Kentucky-based housing intermediary Next Step focuses on educating potential manufactured housing buyers in that state, with the ultimate goal of expanding responsible homeownership of energy-efficient manufactured homes.

Manufactured homes are an important source of housing, including lower-income homebuyers and those in rural and underserved areas. They've come a long way over the years in terms of quality and style. Often, you can't tell the difference between a factory-built and a site-built home – yet the average price of a new manufactured home is $71,600, versus $372,900 for a new site-built home, according to the U.S. Census Bureau.

Next Step's leadership in the field, range of relationships, and passion make them the right partner for this effort. We're encouraged by the results so far.

Continuing Innovation and Collaboration

Pilots are helping us reimagine the mortgage experience. There's really no better way to incubate meaningful innovation quickly, collaboratively, and efficiently, while effectively managing risk. Through them, we're strengthening the industry and creating a shared vision with our partners – and making a difference to people and communities nationwide.

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