Freddie to Buy Mortgages from Union Program
The Federal Home Loan Mortgage Corp., known as Freddie Mac, said it will buy $50 million of low-down-payment mortgages extended to members of certain labor unions.
The loans are to be originated and serviced by PHH US Mortgage Corp., Cherry Hill, N.J. GE Capital Mortgage Insurance Corp. will insure the loans.
Under the program, announced Tuesday, members of participating AFL-CIO unions face down payments of 5% - but only 3 percentage points must come from the borrower's pocket. The remainting 2 percentage points can be a gift from a relative or an unsecured loan from Amalgamated Bank of New York, which is owned by the Amalgamated Clothing and Textile Workers Union.
The program is part of an effort by Freddie Mac and its rival, the Federal National Mortgage Association, to bolster their commitments to housing for poor and moderate-income people.