Updates to the Home Possible Delivery Fee Rates and More in Guide Bulletin 2015-21 - Updated
December 9, 2015
This article is updated to reflect the revised effective dates as announced in the our December 16, 2015, Single-Family Update for the Home Possible and mortgage insurance changes. Information on pipeline coverage and a temporary billing process was also removed as they are no longer applicable.
As a result of our continued focus on making homeownership accessible to more first-time homebuyers and low- to moderate-income borrowers, we are announcing changes to the delivery fee rates and requirements for the following in Single-Family Seller/Servicer Guide (Guide) Bulletin 2015-21:
- Home Possible® and Home Possible Advantage® mortgages (collectively called Home Possible mortgages).
- Mortgages secured by manufactured homes.
- Mortgage insurance (MI).
Except for the updated requirements for manufactured homes, the changes in the Bulletin are effective for mortgages with Freddie Mac settlement dates on or after July 1, 2016. Please read the Bulletin for detailed information on these changes.
Updates to postsettlement delivery fee rates for Home Possible mortgages
We're introducing a new delivery fee cap structure for certain Home Possible mortgages to help preserve affordability for low-to-moderate income borrowers or borrowers in an underserved area. This fee cap structure is designed to manage both affordability and risk.
Home Possible mortgages that do not meet one of the criteria for the delivery fee cap structure will be subject to all standard delivery fee rates including those in the updated Indicator Score/loan-to-value (IS/LTV) delivery fee grid in Exhibit 19, Postsettlement Delivery Fees.
The IS/LTV delivery fee grid has been expanded to include the delivery fee rates for mortgages with LTV ratios greater than 95 percent and less than or equal to 97 percent, the maximum financing levels allowed for Home Possible.
As a result, we are retiring the individual pricing grids for Home Possible and Home Possible Advantage in Exhibit 19.
Revised MI coverage requirements for Home Possible mortgages. Standard MI coverage will apply for Home Possible mortgages with LTV ratios greater than 80 percent and less than or equal to 90 percent. For mortgages with LTV ratios greater than 90 percent, the minimum coverage level is 25 percent. This change is aligned with our commitment to expand homeownership responsibly.
Revised requirements for custom MI. We're expanding the availability of custom MI. We are also updating the minimum coverage requirement and delivery fee rates for mortgages using custom MI.
Reduced delivery fee rate and minimum MI coverage level for manufactured homes
The delivery fee rate will be reduced to 50 basis points from 100 basis points for mortgages secured by manufactured homes.
The required minimum MI coverage level for mortgages secured by manufactured homes with terms greater than 20 years will be reduced by 5 percent to align with standard MI coverage.
These changes are effective for mortgages with Freddie Mac settlement dates on or after January 4, 2016.
To help you understand these changes, check out our Selling System Updates, 4th Quarter 2015 Tutorial, which will be available December 14, 2015, on our Learning Center Updates Web page under the Selling & Delivery tab.