Freddie Mac will offer its “Home Possible” mortgages — which give teachers, firefighters, law enforcement and healthcare workers 30 percent more buying power — to 1.5 million members of the U.S. armed forces.
Designed to foster home ownership in underserved communities and among at or below median-income families, 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. They have zero or very low down payments, flexible credit requirements, and higher loan-to-value ratios.
A temporary subsidy buy-down allows Home Possible mortgage holders to reduce their initial interest rate by up to 1.5 percent in the first year, increasing home-purchasing power by up to 30 percent. With a 3 percent down payment, a borrower earning $2,761 a month can use the temporary buy-down feature to boost buying power from $200,000 using a standard 97 percent loan-to-value-ratio mortgage to $260,400, Freddie Mac said in a press release.
To qualify, military borrowers must be on active or reserve duty in the Army, Navy, Air Force, Marines, Coast Guard, or National Guard, or less than two years out of the military.