Content area
Full text
Underwriting will focus on avoiding the layering of risk, officials said.
Freddie Mac introduced a new low-downpayment affordable-housing product that will be available later this year for lenders that maintain a high servicer performance rating.
In a June 18 announcement, the company also said it is deepening the mortgage insurance requirement for its Affordable Gold program to 35 percent, and making some underwriting changes to improve loan performance and help lenders expand markets responsibly.
Among the products included in the changes are the 3/2 Option and a new Affordable Gold 97 percent loan-to value mortgage. The changes will be implemented in the fall, along with specific servicer eligibiity requirements for the Affordable Gold 97.
Like Freddie Mac's other Affordable Gold products, the 97 percent LTV mortgage is aimed at low- and moderate-income borrowers who have the necessary income and credit history but lack sufficient funds for a downpayment. Borrower income is generally limited to 100 percent of area median income for these products.
The underwriting changes are designed to manage the layering of risk and to improve loan performance.
"We've observed...