Freddie Mac Expands Low-Income MortgageOption
McLEAN, Va. - (02/21/05) -- Freddie Mac last week introduced anew product aimed at expanding mortgage lending for credit unionsand other community borrowers. The secondary market giant said itwill now buy loans under its Home Possible Neighborhood Solutionsprogram with 100% loan-to-value ratios and with which the borroweris carrying a debt-to-income ratio of as much as 45%, up from theregular 38% ratio. The program is aimed at boosting financing forcommunity for working families and community workers, like police,firefighters, teachers and healthcare workers--a key credit unionmarket, according to Brad German, a spokesman for Freddie Mac."This gives credit unions another bow in their quiver to serve abroader market," he told The Credit Union Journal. To participatein the program credit unions must be Freddie Mac authorized loanservicers and use the company's LoanProspecter automatedunderwriting program. Currently Freddie will buy so-called 100% LTVloans, but 3% fees on the loans make them the equivalent of 97% LTVloans.