Freddie Mac on Monday unveiled its version of a controversial lower-cost mortgage insurance option for low-down-payment loans

In the wake of industry contention over Fannie Mae's similar plan, unveiled last month, Freddie said it would let borrowers buy lower insurance coverage for loans originated on its automated underwriting system-in return for either an up-front fee or a higher interest rate.

A spokesman for the Mortgage Insurance Companies of America said the trade group, which has opposed Fannie Mae's program as an intrusion into mortgage insurance, would reserve comment until it studies the Freddie Mac version.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.