Soon, You'll Be Able to Finance More Mortgages
September 13, 2018
The secondary mortgage market for sweat equity and shared equity homeownership is about to get bigger. As part of our Duty to Serve plan, Freddie Mac will launch robust offerings and product flexibilities for both fields. So, what does this mean for lenders, nonprofits, shared equity program providers and their borrowers? It means you’re getting what you asked for to help you:
- Do more business and expand your affordable footprint in historically underserved markets.
- Finance more mortgages for families with low to moderate income in the rural housing market.
- Preserve housing affordability under shared equity homeownership programs through the community land trust model or income-based resale restrictions.
- Help borrowers who may need sources of down payment.
- Take advantage of simpler underwriting requirements.
What does it mean for your borrowers? They get increased access to affordable sustainable homeownership.
New Kid on the Block with New Ideas
How will this happen? We’re new to the shared equity homeownership field, but we’ve looked at existing mortgage products, conducted in-depth research, and gathered industry feedback. By taking a fresh look, we’re able to introduce you to something that’s different from what you’ve seen. Something that aims to find the right balance between providing three competing priorities:
- Transactional ease for lenders.
- Underwriting that promotes sustainable homeownership for borrowers.
- More opportunities to preserve affordable housing units over time for shared equity homeownership program providers.
Additionally, you told us that insufficient funds for a down payment is a significant barrier for borrowers, especially in rural markets. We took a look at our Home Possible® sweat equity parameters and are enhancing them so that creditworthy families with low-to-moderate incomes will have more flexibility by using sweat equity as a down payment source.
These are just a few ways that we’re Reimagining the Mortgage Experience℠.
For More Information
- Look for details in an upcoming Duty to Serve Single-Family Seller/Servicer Guide Bulletin.
- Contact your Freddie Mac representative.