Community Gold®
Reach More Borrowers and First-Time Homebuyers
Community Gold, Freddie Mac's Community Development Lending (CDL) product, helps you reach more borrowers including first-time homebuyers and promote community revitalization.
When a community participates in one of Freddie Mac's CDL initiatives or alliances, Community Gold loans may be used to finance the purchase, refinance, purchase-and-renovation or refinance-and-renovation of 1- to 4-unit properties. For approved participating lenders, Community Gold offers a versatile affordable lending tool designed to help more families become homeowners.
When a Freddie Mac certified agency provides comprehensive pre- and post-purchase homeownership counseling to borrowers, those borrowers may be eligible for Community Gold Mortgages. Community Gold makes it easier for families and individuals to become homeowners with great borrower features such as a low down payment, flexible loan-to-value ranges and debt-payment-to-income ratios.
Key Features
- Community Gold loans can be used for purchase or refinance transactions, with or
without renovation
- Requires minimal down payment, as little as $1000 or 2 percent from Borrower Funds
- No maximum housing expense-to-income ratio
- No reserves required for 1- and 2-unit properties
- A variety of sources of funds may be used for down payment, closing costs and prepaids
- Flexible treatment of credit and debt payment-to-income ratios
Borrower Benefits
- Offers a versatile financing tool designed to accommodate a variety of lending needs, including purchase or refinance, with or without renovation on 1- to 4-unit properties
- Allows funds for down payment and closing costs to come from a variety of sources, including funds from Affordable Seconds®, gifts or grants, Individual Development Accounts (IDAs) and others
- Reap the benefits of homeownership sooner by reducing the time needed to save for a lower down payment
- Reduces time required to re-establish an acceptable credit reputation after bankruptcy or foreclosure
- Promotes and enhances community revitalization
Loan Eligibility
- 15-, 20-, and 30-year fixed-rate mortgages
- Mortgage must be purchase or refinance, with or without renovation
- Refinances mortgages may be "no cash-out" or "cash-out" if the cash-out is used only for renovation
- Loan-to-value (LTV) ratios must be:
- 97% for 1-unit properties
- 95% for 2-unit properties
- 90% for 3-unit properties
- 80% for 4-unit properties
- Total loan-to-value (TLTV) should not exceed:
- 105% without renovation
- 120% with renovation
Credit Requirements
- No maximum housing expense-to-income ratio
- Monthly debt payment-to-income ratio should not be greater than 42%
- When monthly payments on secondary financing begin before the sixth anniversary date
of mortgage, they must be included in the debt payment-to-income ratio
- No principal, interest, taxes and insurance (PITI) reserves required for 1- and 2-unit properties
- Two months' PITI reserves required for 3- and 4-unit properties
- No income limits if property is located in a targeted area
Delivery and Execution Requirements
- Gold Cash®, Guarantor and Multilender Swap executions
For More Information
For further details about this product, print out a Community
Gold factsheet [PDF 202K].
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