Sen. Nelson, Veterans, Lenders Applaud Freddie Mac Effort to Boost Military Home Buying Power Up to 30 Percent

Home Possible(SM) Suite Expansion Aimed at Active, Reserve Members of Armed Forces 


MCLEAN, Va., Sept. 21  /PRNewswire/ -- Freddie Mac today announced it is expanding its Home Possible(SM) affordable mortgage suite to boost the home buying power of nearly 1.5 million U.S. military personnel in response to calls from Senator Ben Nelson (D-NE) of the Senate Armed Services Committee, the Hispanic War Veterans of America and different lenders to help more military families becomes homeowners.

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

"Today's announcement is good news for military families looking to own their own home and share in the American Dream they are fighting to protect for all of us," said Nebraska's Senator Ben Nelson.  "I want to thank Freddie Mac for answering the call and creating this welcome new affordable homeownership opportunity for military families in Nebraska and across the nation."

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.

"Freddie Mac's goal is to help the men and women who serve in our nation's armed forces enjoy the American Dream of homeownership while giving our lender customers new and better ways to build their market share," said Paul Mullings, senior vice president of Single Family Sourcing at Freddie Mac. "Expanding Home Possible's reach underscores Freddie Mac's search for new and creative ways to serve America's borrowers by strengthening America's mortgage market."

"The Hispanic War Veterans of America has long advocated such changes in the mortgage industry so more veterans and their families can become homeowners.  Freddie Mac is taking the proverbial 'Bull by the Horns' and making it happen," said Erwin Huelswede, retired Air Force General and national executive director of the Hispanic War Veterans of America.  "Thanks to Freddie Mac many veterans and their families will no longer be knocking on the door, they will be answering the door!!"

We are very excited to take part in such a meaningful and worthwhile program that promises to help so many deserving military families," said Mike Jablonski, Mortgage Loan Production Administration manager for BB&T.  "Part of our mission at BB&T is to help our clients achieve economic success and financial security while working to improve the quality of life in the communities where we operate.  The Home Possible initiative definitely meets that objective."

Home Possible(SM) In Action

In order to help service personnel become homeowners, Freddie Mac is extending a key Home Possible feature that will enable military personnel to use extended temporary subsidy buy-downs to reduce their 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.

Home Possible is available through Freddie Mac's national network of more than 2,000 lenders and 10,000 mortgage brokers using Loan Prospector(R), Freddie Mac's automated underwriting service.

To qualify, military borrowers must be on active duty, in the reserves, or have been separated from their respective services for no more than two years. Home Possible mortgages are available as 15-, 20-, 30- and 40-year fixed rate mortgages or as 7/1 or 10/1 adjustable rate mortgages for 1-2 unit properties. 5/1 ARMs are also available with 1-unit properties but not with a temporary buydown.

For more information, visit http://www.freddiemac.com/singlefamily/homepossible or contact your Freddie Mac representative or call 800-FREDDIE.

Freddie Mac is a stockholder-owned company established by Congress in 1970 to support homeownership and rental housing.  Freddie Mac fulfills its mission by purchasing residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets.  Over the years, Freddie Mac has made home possible for one in six homebuyers and four million renters in America. http://www.freddiemac.com/ 

DATASOURCE: Freddie Mac



CONTACT:  Brad German of Freddie Mac, [phone]



Web site:  http://www.freddiemac.com/ 

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