CHICAGO - People who have been paying a high percentage of their income for rent may qualify for home loans under a new program offered jointly by Freddie Mac, Sears Mortgage Corp., and Mortgage Guaranty Insurance Corp.

The companies, in an announcement last week, said they believed many creditworthy people cannot qualify for mortgages under standard guidelines that use ratios of housing expense to income or debt to income.

Under the new program, called AQ, for Alternative Qualifying, the underwriting method will focus on cash-flow analysis and proven ability to handle higher levels of debt or housing cost than the usual guidelines permit. Renters are expected to be major beneficiaries as they become first-time homebuyers.

Expansion Is Planned

The three will test the program in Chicago with 1,000 loans and plan to expand it to Atlanta, St. Louis, Los Angeles County, and additional cities.

If the alternative guidelines become standard, lending to people with low and moderate incomes would probably expand dramatically.

The average loan size in the Chicago pilot is expected to be between $60,000 and $70,000, so the total loan commitment is $60 million to $70 million.

Sears Mortgage, based in Vernon Hills, Mich., will be the underwriter and the Federal Home Loan Mortgage Corp. will give Sears guaranteed securities in exchange for the loans. Sears is expected to sell the securities to investors.

Mortgage Guaranty, based in Milwaukee, will provide mortgage insurance, which is required when down payments are less than 20%.

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