Alt 97 Mortgage

Flexible down payment options for your borrowers

Important Notice

Effective August 1, 2012, we are retiring our Alt 97 Mortgage offering as announced in Single-Family Seller/Servicer Guide Bulletin 2012-8 on March 15, 2012.

Freddie Mac's Alt 97® Mortgage is a powerful offering that can help you reach more borrowers with good credit but limited savings for a down payment. With Alt 97, your first-time homebuyers and move-up borrowers can move in or refinance with less cash – as little as five percent required down payment for purchase transactions coming from a combination of flexible options.

Alt 97 is designed specifically for borrowers who have worked hard to establish and maintain a strong credit history.

There are no income or geographic limits for Alt 97 Mortgages, so you can reach a wide range of borrowers with a variety of financial circumstances and access to many nontraditional sources of funds.

When you offer Alt 97, you'll add a flexible, competitive mortgage to your product line and open up more opportunities for your borrowers.

Product Features

Feature	Requirements
Property Type	1-unit owner-occupied primary residences, including condominiums and units in planned unit developments (PUDs).
Eligible Mortgage Products	15-, 20- and 30-year fixed-rate mortgages
Transaction Type	Purchase No-cash out refinance
Maximum LTV Ratios	LTV ratio equal to or greater than 90% but not greater than 95%.
Down Payment or Closing Costs	No minimum down payment required from borrower funds. 5% down payment required, which may come from any combination of the following options: Borrower's own funds, including secured borrowings, such as a 401 (k) loan. A gift or unsecured loan from a related person or an agency. A grant or unsecured loan from a municipality or nonprofit. Funds from Individual Development Accounts (IDAs) or Community Savings Systems. Employer-assisted housing funds, either in the form of an unsecured loan or a grant. Borrower funds can come from other cash or equity as defined in Guide Sections 26.2 or 26.3.
Eligibility/Underwriting	Loan Prospector® Accept or manually underwritten mortgages Minimum Indicator Score of 620 unless otherwise specified in the Guide. Minimum Indicator Score of 700 for manually underwritten mortgages No non-occupant co-borrowers No reserves required No income limits Maximum debt-to-income ratio of 45 percent for manually underwritten mortgages
Execution Options	Fixed-rate servicing-released Cash Fixed-rate servicing-retained Cash Fixed-rate Guarantor MultiLender Swap
Delivery Fees	An Alt 97 postsettlement delivery fee will be assessed, in addition to other fees assessed based on the individual characteristics of the mortgage. See Single-Family Seller/Servicer Guide (Guide) Exhibit 19 for details on applicable fees. A secondary financing delivery fee will not be assessed on an Alt 97 Mortgage with secondary financing.
Special Delivery Requirements	May be pooled with other conventional fixed-rate mortgages.
*Single-Family Seller/Servicer Guide*	Refer to Guide Chapter D33.

Download an Alt 97 Mortgage fact sheet for more details.

Lender Benefits

Freddie Mac's Alt 97 Mortgage helps you:

Attract a variety of borrowers with strong credit histories, including low- and moderate-income borrowers, with limited funds for a down payment.
Streamline your operations and diversify your offerings using Loan Prospector automated underwriting technology.

Benefits for Your Borrowers

For your borrowers, an Alt 97 Mortgage:

Requires only five percent down, regardless of income amount or geographic location.
Provides flexible financing options with down payment funds coming from a combination of nontraditional sources, and no minimum requirement from borrower funds.

For More Information

Call your Freddie Mac representative.
Print out an Alt 97 Mortgage fact sheet.
For information on sources of affordable secondary financing, click here.

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.