Freddie Mac’s 3% down program & the CFPB amends the “Know Before You Owe” rule.

By Matt Joy, Princeton Mortgage Wholesale


Last Thursday, Freddie Mac released a new conventional 3% down program. The program is designed to help qualified first-time homebuyers obtain financing for their home. That seems simple enough, right? I mean… didn’t Freddie already have this program though? The short answer is yes (FHLMC HomePossible offers 3% down with certain restrictions) …however their newest version of this program, called HomeOne, will remove the geographic and income restrictions that come with the HomePossible product. Of course, like most things Freddie and Fannie release the details are shaky, but what we do know is that the loan must be submitted through LP, (Loan Prospector DBA Freddie’s Automated Underwriting System) the property must be a 1-unit property and can be used for single family dwelling, condo or townhouse (manufactured homes are excluded).

Okay… I’m digging this. Another option for first-time homebuyers who don’t have a ton to put towards a down payment but who are looking to get out of the abysmal rental market. I can get behind this. There is one small catch in that at least one of the borrowers on the loan must be a first-time homebuyer (makes sense… the program is designed for them) and if both borrowers are first timers at least one of them must take an educational course on homeownership to qualify. So… all you must do is take a class and then you’re eligible? Obviously, you’ll have to get approved through your lender… but that’s not a bad deal at all. It’ll be interesting to see what other programs or products come out during this difficult time in the housing market. I think we’ll continue to see the agencies expand their credit box while other companies continue to dabble in the non-QM products.

Before we part… did you see that the CFPB is updating the TRID Rule fixing the “black hole” issue? In all honesty when I sat down to right the blog this morning I thought this would be a bigger deal than it is. As it stands now lenders could only use the Closing Disclosure (CD) to reset the tolerance if there are less than four business days between the time the CD goes out with the new estimates and the closing date. Have you had this happen to you? Regardless, the new rule in place says that you do not have to wait the four days to reset tolerances. You can reissue a CD resetting tolerances regardless of the time frame. You can read more about the change here.

Talk to you soon!

MJ



The opinions expressed in this post are the sole view of the writer and do not reflect the opinion of Princeton Mortgage Corporation.

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