Freddie Mac is expanding what it calls it's Home Possible suite of mortgages through hundreds of lenders to include Military Personnel, beginning 10/6/2006. Originally available to teachers, firefighters, law enforcement officers and healthcare workers, the program boosts their buying power, allows more flexibility for lower credit scores and reduced mortgage insurance coverage levels.
According to a recent Freddie Mac press release, "The Home Possible changes are expected to increase by as much as 30 percent the home buying power of members of the Army, Navy, Air Force, Marines, Coast Guard, and National Guard on active duty, in the reserves, or separated from their respective services by less than two years." Fixed rate mortgages up to 40-year as well as 7/1 and 10/1 ARMs are available for 1-2 unit properties under this program.
"Home Possible mortgages have zero or very low downpayments and flexible credit requirements designed to foster homeownership in underserved communities and among at or below median income families. Home Possible also offers higher loan-to-value ratios and other underwriting features to help critical community workers such as teachers, police, firefighters and health care workers – and now military personnel – to afford homes in the communities where they serve."
One of it's many new enhancements will allow borrowers who qualify for Home Possible Mortgages to be eligible to use temporary subsidy buydown plans (available 11/19/06) to reduce initial interest rates. "Specifically, the subsidies can be used to reduce the interest rate by up to 1.5 percentage points in the first year, effectively increasing home purchasing power by as much as 30 percent. Allowable subsidies can come from a wide range of sources, such as gifts or grants.
For example, by using the temporary buy-down feature with a three percent down payment, a borrower with adequate reserves earning $2761 a month can boost his or her home buying power from $200,000 to $260,400 with a Home Possible Mortgage compared to a standard 97 percent LTV mortgage, all other things being equal."
Check with a mortgage specialist for details.
(If you are not already working with a mortgage provider, feel free to contact us for help in locating one.)
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