Freddie Mac launched a mortgage product on Monday that’s aimed at attracting a growing share of possible homebuyers: Those making a decent income, but with no money saved for a down payment.
The Home Possible Advantage mortgage is directed at low- and medium-income buyers making no more than 100 percent of the area median income. If a buyer meets those requirements, they could get a home with as little as a 3 percent down payment.
Dave Lowman, Freddie Mac’s executive vice president of single-family business, said in a release that the move was intended to “foster a strong and stable mortgage market.”
“Home Possible Advantage gives qualified borrowers with limited downpayment savings a responsible path to homeownership and lenders a new tool for reaching eligible working families ready to own a home of their own,” he said.
Homeownership among millennials slipped this year to the lowest levels since the Census started tracking it. Experts have floated various reasons for the decline, including student loan debt, millennials’ migration toward urban centers and other factors that might be impacting the age group’s ability to save up for a down payment.
To be eligible for the new product, borrowers have to meet the mortgage giant’s minimum credit rating and income requirements, and first-time buyers have to take a homebuyer education course. Private mortgage insurance (PMI) is required as part of the plan. Freddie Mac created a nice Q&A about the new product if you have more questions.
This article originally published at http://dc.urbanturf.com/articles/blog/freddie_mac_launches_mortgage_product_with_3_down_payment/9311
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