you and freddie mac: better business together · principal upfront, a home possible loan with...

You and Freddie Mac:Better Business Together

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Affordable Lending Manager Northeast: Jason C Jefferies

© Freddie MacCONFIDENTI ALYou and Freddie Mac: Better Business Together 22© Freddie MacCONFIDENTI ALYou and Freddie Mac: Better Business Together

Chartered by Congress in 1970 to provide liquidity, stability, and affordability to the U.S. housing finance market

Operates three main business lines:» Single-Family (1 to 4 units)» Multifamily (5 or more units)» Investments

Participates in the secondary mortgage market» Buys mortgages and related securities» Issues guaranteed mortgage-related securities» Offers an array of products to fit market needs

Provides resources and tools to support customers and educate the public

Corporate Background

© Freddie MacCONFIDENTI ALYou and Freddie Mac: Better Business Together

What Freddie Mac Does

Lenders (or Sellers)• Originate loans with borrowers• Exchange mortgages for

Participation Certificate (asset) or sell for cash

Freddie Mac• Buys mortgages• Guarantees a PC• Sells PC to investors• Retains investments in

mortgages and PCs

Mortgage

Mortgage PC

PC

$$

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Who We Are


Offering financing solutions to help creditworthy low- to moderate-income borrowers become homeowners

Promoting innovation to address changing needs and demographics

Working with housing finance agencies

Forming alliances across the industry to create ownership opportunities: Quicken, Bank of America, Easter Seals

Supporting borrowers through Freddie Mac Borrower Help Centers and Network

Providing resources, training, and tools

Moving Affordable Lending Forward


Who Do We Target?

First-Time Home Buyers Millennials Multi-Cultural Buyers Disaster Areas Underserved Areas Low- to Moderate-Income Buyers

Income less than 80% of Area Median Income – Low-Income Purchase

Income less than 50% of Area Median Income – Very Low-Income Purchase


Hispanics and Asians

growing fastest

Changing demographics


FHA Loan Share Comparison Chart and Table by Minority

Source: Data comes from 2015 HMDA originations and purchases for single family and manufactured housing properties, excluding redundant loans purchased by commercial banks, savings banks, savings associations, and affiliated institutions. Figures also exclude jumbo loans, home improvement loans, loans with a reported rate spread, HOEPA loans, second liens, and unsecured loans. Minority share is calculated using the five race variables and one ethnicity variable per applicant following the HMDA minority definition that excludes from eligibility all loans where the borrower is white but ethnicity is missing, non-Hispanics with missing race and where both race and ethnicity are missing.

Essex Hunterdon Morris Somerset Sussex Union

Asian 157,119 14.4% 7,276 9.6% 9.4% 9.0% 6.6% 5.3% 13.3% 14.6%Black 159,488 43.7% 3,855 54.8% 60.9% 27.3% 30.8% 45.2% 69.6% 61.4%

Hispanic 278,433 43.7% 6,961 50.8% 53.0% 25.9% 38.1% 42.6% 42.6% 59.4%Minority 606,914 35.9% 17,971 34.8% 46.9% 16.8% 20.3% 20.7% 40.0% 52.3%

Non-Minority 1,846,178 21.0% 36,739 22.3% 14.0% 14.4% 12.9% 11.8% 30.0% 17.3%Overall 2,751,148 24.8% 64,126 27.3% 30.2% 15.4% 15.8% 16.2% 31.8% 35.7%

Select New Jersey CountiesShare of FHA loans by

minority group

US Conforming Loan Count

U.S.New Jersey Conforming Loan Count

New Jersey


Conventional Loan Share Comparison Chart and Table by Minority

Source: Data comes from 2015 HMDA originations and purchases for single family and manufactured housing properties, excluding redundant loans purchased by commercial banks, savings banks, savings associations, and affiliated institutions. Figures also exclude jumbo loans, home improvement loans, loans with a reported rate spread, HOEPA loans, second liens, and unsecured loans. Minority share is calculated using the five race variables and one ethnicity variable per applicant following the HMDA minority definition that excludes from eligibility all loans where the borrower is white but ethnicity is missing, non-Hispanics with missing race and where both race and ethnicity are missing.

Essex Hunterdon Morris Somerset Sussex Union

Asian 157,119 79.4% 7,276 89.2% 90.1% 89.6% 92.5% 94.5% 73.3% 83.9%Black 159,488 32.4% 3,855 34.5% 35.0% 72.7% 60.7% 49.7% 17.4% 32.4%

Hispanic 278,433 42.6% 6,961 43.0% 44.2% 70.7% 56.2% 53.9% 43.6% 36.6%Minority 606,914 49.6% 17,971 60.1% 50.2% 80.4% 76.4% 77.8% 45.8% 43.6%

Non-Minority 1,846,178 63.9% 36,739 71.4% 84.2% 81.5% 83.9% 86.1% 58.0% 80.4%Overall 2,751,148 60.5% 64,126 67.1% 67.5% 80.8% 81.1% 81.9% 56.8% 61.0%

Select New Jersey CountiesShare of

conventional loans by

minority group

US Conforming Loan Count

U.S.New Jersey Conforming Loan Count

New Jersey

© Freddie MacCONFIDENTI ALYou and Freddie Mac: Better Business Together 10

Home Possible Mortgages


Freddie Mac offers a portfolio of products to attract and serve qualified borrowers including:

» Affordable products with allowable LTVs to 97% and TLTVs to 105%

» Products for first-time homebuyers and low- to moderate-income buyers

» Products for the ever growing condominium market

» Products that support rural and manufactured housing

Freddie Mac Mortgages


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Responsible, high LTV mortgage options for first-time homebuyers, low- and moderate-income borrowers and move up buyers

Borrower Profile Key Features Borrower Benefits First-time homebuyers Repeat homebuyers Families in underserved areas New immigrants Very-low and low-to-moderate

income borrowers

Maximum LTV/TLTV: Home Possible Advantage –

97% LTV / 105% TLTV Home Possible – 95% LTV /

95% TLTV Eligible annual income of up to

100% of Area Median Income (higher in high cost areas)

No income limit in underserved areas

Temporary subsidy buydown allowed

Homebuyer education onlyrequired for one borrower when all borrowers are First-Time Homebuyers

Low down payment No minimum borrower

contribution from personal funds

Flexible down payment and closing cost funding options

No cash-out refinancing No reserves required on 1

unit owner-occupiedproperties

Homebuyer education available at no cost to the borrower

Home Possible and Home Possible Advantage Mortgages


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Why choose Home Possible over FHA?

WHAT THIS MEANS: With more funds applied toward the principal upfront, a Home Possible loan with private mortgage insurance allows the borrower to build equity faster over time.

For many borrowers, a loan insured with private mortgage insurance (MI) can be less costly than an FHA loan

Home Possible v. FHAConventional mortgage insurance automatically ends when the LTV drops below 80%

FHA mortgage insurance stays for the life of the loan (unless the borrower puts down a 10% down payment)

Conventional mortgage insurance is only monthly or single premium

FHA is upfront AND monthly premiums

Downpayment funds applied to principal

Downpayment funds applied to principal AND upfront PMI


We Can Grow Responsible, Sustainable Affordable Homeownership – Together

Realtors


Web Resources


For more information on Home Possible

FreddieMac.com/homepossible

FreddieMac.com/learn/mp/homepossible.html


Renewing the affordable lending ecosystem

Thinking and acting holistically

Strategically creating relationships

Calibrating for the market

Supporting homebuyer success

© Freddie MacCONFIDENTI ALYou and Freddie Mac: Better Business Together 19

Synergy / Partnering with Real Estate Professionals/ Housing Counselors


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NJ based lenders offering Home Possible:

• Weichert Financial Services

• American Neighborhood Mortgage Acceptance Company (Annie Mac)

• First Choice Loan Services

• JP Morgan Chase

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