100% Financing With Freddie Mac’s Home Possible

As sub prime, Alt-A and 2nd mortgages continue their disappearing act, the GSE’s have been busy trying to help make housing more accessible and affordable. Both Fannie Mae and Freddie Mac have brought forth fantastic programs that can help consumers buy homes with no down payment or refinance homes with little remaining equity.

Fannie Mae’s initiative is called MyCommunity Mortgage and I wrote a previous article about that. Freddie Mac has something similar called Home Possible. Here are a few highlights:

• 100% purchase or rate and term refinance, with no minimum borrower contribution. (105% CLTV allowed on SFRs)
• 30 & 40 yr fixed, along with 5/1, 7/1, and 10/1 ARMs for 1–2 unit properties
• 3% seller contribution allowed
• Temporary buydowns allowed with .5% annual increases
• 140% of median income in high cost states like CA
• Reduced MI coverage
• No reserves required (SFR)

One advantage of Home Possible over MyCommunity is that it allows the borrower to own another home. Thus, someone who owns a home but cannot sell it in this market can still use Home Possible to purchase another home.

Home Possible can be also used with 3–4 unit properties as well, although the guidelines are a little more restrictive. Like MyCommunity Mortgage, there are enhancements for those employed in a public service capacity. Subtle aspects of the Automated Underwriting Systems that approve these loans are built to be more flexible or lenient for teachers, policemen, firemen, and public health workers.

Do you live or sell real estate in California? Is your lender experienced with these programs? Give me a call or send me an email for more information, to be pre-qualified or to have your client pre-qualified for one of these terrific loan programs.