Freddie Mac Home Possible Advantage Mortgages

Program Overview: Are you currently looking for a new house, or have you been frustrated with the process in the past? Freddie Mac Home Possible advantage mortgages offer outstanding flexibility and options to help meet your needs. With Home Possible, you’ll capitalize on opportunities to meet the home financing needs of low- and moderate-income borrowers looking for low down payments and flexible sources of funds. Freddie Mac Home Possible AdvantageSM offers more flexibility for maximum financing. This offering adopts the responsible and affordable flexibility of Home Possible, but with additional requirements. Below are some of the key features of the Home Possible Advantage Mortgage.

Feature	Home Possible	Home Possible Advantage
Property Types	1- to 4-unit primary residences Condos PUD Manufactured homes (with restrictions)	1-unit primary residences Condos PUDs
Eligible Mortgage Products	Fixed-rate mortgages. 7/1 and 10/1 ARMs if secured by a 1- or 2-unit primary residence. 5/1 ARMs if secured by a 1- or 2-unit primary residence other than a manufactured home. Construction Conversion and Renovation Mortgages. Mortgages with an RHS Leveraged Second.	Fixed-rate mortgages. Construction Conversion and Renovation Mortgages.
Maximum LTV/TLTV Ratios	For Home Possible: LTV/TLTV/HTLTV ratio of 95 percent. For Home Possible Advantage: 97 percent LTV/ 105 percent TLTV.
Eligibility/Underwriting	A Home Possible mortgage may be submitted to Loan Prospector® or may be a manually underwritten mortgage. See Guide Section A34.8 for credit underwriting requirements.
Requirements for Minimum Borrower Contribution and Sources of funds	See Guide Section A34.10 for requirements on minimum contributions from borrower personal funds, reserves and permitted sources of funds.
Homebuyer Education	See Guide Section 34.12 for homeownership education and landlord education requirements related to: Borrower(s) who are all first-time homebuyers. Restrictions on parties that may provide the homeownership education. Homeownership education documentation  that must be retained in the mortgage file. Acceptable types of homeownership education, including Freddie Mac’s CreditSmart® Borrower disclosure requirements. Landlord education (2- to 4-unit primary residences) requirements for purchase transactions.
Delivery Fees	See Guide Exhibit 19 for: Special postsettlement delivery fees are applicable to Home Possible mortgages and Home Possible Advantage mortgages. Delivery fee exclusions.
Special Delivery Requirements	See Guide Section 17.18(b) for special delivery instructions for Home Possible mortgages.
Single-Family Seller/Servicer Guide	Refer to Guide Chapter A34.

Key Features and Flexibility

•  Fixed-rate mortgages with a term of up to 30 years.
•  Eligible properties: one-unit properties, condominiums, and planned united developments. (Manufactured homes are ineligible.)
•  All borrowers must occupy the property as their primary residence.
•  Maximum loan-to-value (LTV) is 97% and maximum total loan-to-value (TLTV) is 105%.
•  Reduced mortgage insurance coverage (18%).
•  Temporary Subsidy Buydown plans lower initial monthly payments.
•  No reserves required.
•  More eligible sources of funds for down payment and closing costs.
•  Eligible annual income up to 100% of Area Median Income or higher in select counties and no income limit in underserved areas.
• May be submitted through Loan Prospector® or manually underwritten

Benefits

• No minimum borrower contribution from borrower personal funds.
• Gift from related persons and other sources of funds permitted for down payment and closing costs.
• Lower monthly payments from reduced mortgage insurance coverage levels.
• Lower monthly payments means less income needed to qualify.
• No minimum LTV limit.
• No reserves required, lowering cash needed to close.
• Flexible closing cost funding options.

Home Possible Advantage or FHA?

Comparison of Home Possible Advantage with monthly PMI vs. FHA using $150,000 sales price.

30-year fixed rate mortgage scenario	Home Possible Advantage 18% Monthly MI Coverage 4.375% Note Rate**, 97% LTV FICO Ranges 680-719 / 720-759	FHA No FICO Cuts 3.750% Note Rate* 96.5% LTV
Base Loan Amount	$145,500	$144,750
Upfront MIP Rate (%)	0	1.75%
Upfront MIP Cost ($)	0	$2,533
Total Loan Amount	$145,500	$147,283
Down Payment	$4,500	$5,250
Monthly MI Rate (%)	.80%/ .60%	0.85%
Monthly MI ($)	$97/$73	$102
Principal/ Interest	$726	$682
Total Monthly Payment	$823/$799	$784

The Freddie Mac Home Possible advantage mortgage could be a great option. Call today to get more information and started on the loan process today!