The new program is an alternative to FHA which has a larger down payment requirement.
Before you decide this is not for you, let us summarize the federal definition of a first time home buyer. This is someone who has not owed a home in the past 3 years. If this is you or someone you know please continue. This new program called HomeOne will be available beginning July 29th. Just one of the borrowers must be a first time buyer in order to qualify. The new HomeOne program will not have income or geographic restrictions such as Fannie Mae's Home Possible which is also a low down payment program.
In order to qualify a borrower is required to pass a risk assessment that includes factors such as borrowers credit profile, an appraisal of the property and an evaluation of their ability to repay the loan. This program will only be available as fixed rate option and must meet conforming loan limited and is only available single unit residences. These requirements are designed to combat the risk of a low down payment. The guidelines will even go as far as requiring each borrower to take a home-buyer-education class.
Since nearly half of housing purchases are first-time buyers this program will meet the needs with an option that makes closing easier and provide more savings to a borrower at closing.
If you are interested in speaking with a Loan Expert about the Freddie Mac HomeOne program please contact Ladera Ranch Home Loans at 1-877-353-9527
A Summary of Origination and Underwriting Requirements:
TEMPORARY SUBSIDY BUYDOWNS • Permitted, meeting the requirements of Guide Section 4204.4.
MAXIMUM LTV/TLTV/HTLTV RATIOS • 97 LTV / 105 TLTV (when secondary financing is an Affordable Second ) / 97 HTLTV.
PERMITTED SOURCES OF FUNDS • All funds used to qualify borrowers, including, but not limited to, funds for down payment, closing costs and reserves, must come from the eligible sources described in Guide Section 5501.3. • For Mortgages with interested party contributions, the requirements in Section 5501.5 must be met. • When lender credit is being used for the mortgage transaction, the requirements in Section 5501.6 must be met.
CREDIT UNDERWRITING (LOAN PRODUCT ADVISOR ® ) • At least one borrower on the transaction must have a usable Credit Score. • HomeOne Mortgages must be Loan Product Advisor® Mortgages with a Risk Class of Accept. • Manually underwritten mortgages are not eligible
OCCUPANCY • Primary residence. All borrowers must occupy the mortgaged premises as a primary residence
MORTGAGE INSURANCE (MI) REQUIREMENTS • The standard required, or custom MI coverage levels for HomeOne are 35% and 18%, respectively. • Sellers must obtain Freddie Mac’s approval to sell mortgages with annual or monthly premium lender-paid mortgage insurance to Freddie Mac. • See Guide Section 4701.1 for additional MI requirements and options, including custom MI.
COLLATERAL EVALUATIONS • Standard Guide requirements apply
HOMEBUYER EDUCATION AND BORROWER DISCLOSURE Required when all Borrowers are First Time Homebuyers as defined in the Guide. See Guide Section 5103.6 for homeownership education requirements.
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