Freddie Mac Launches Mortgage Program with 97 Percent LTV

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The new Home Possible Advantage (SM) program of Freddie Mac is designed to provide mortgage loans with maximum loan-to-value ratio of 97%. This will enable borrowers to make a down payment of just 3%.

The program is designed to assist households with low and medium incomes and with limited savings for down payment to purchase a single-family home. Only conventional conforming mortgages will be made available via the program. Borrowers will have to adhere to the current conforming loan limits set by the Federal Housing Finance Agency.

The loans will have to have a fixed interest rate. Freddie Mac providers three term options. The mortgage term can be 15, 20 and 30 years. This gives borrowers flexibility to plan the repayment of their mortgage based on the individual circumstances and plans.

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Both first-time home buyers and other home buyers will be able to access the mortgage loans with 3% down payment. In order to qualify for a loan with LTV of 97%, first-time home buyers must participate in a borrower education program which is approved by Freddie Mac. One example is the CreditSmart program. Loan applicants will be assessed with the use of an automated underwriting system, which will special compensating factors for the purpose of evaluating creditworthiness.
Under Home Possible Advantage (SM), existing mortgage borrowers will be able to refinance their loans. The government-sponsored enterprise provides mortgage refinance without a cash-out option.

The executive vice president of the enterprise’s single family business, Dave Lowman, commented that the new program offers a responsible path towards homeownership to qualified borrowers while for lenders it will be a new tool for reaching to eligible families. A major goal of the program is to bring stability to the mortgage market.

The new mortgage loan product with 3% down payment is expected to be officially implemented on March 23rd 2015.

Christian

Christian

Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info
Christian

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