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Freddie Mac vs FHA

By
Mortgage and Lending with First Option Mortgage 269761

Freddie Mac (FHLMC) offers programs for conventional financing. Federal Housing Authority (FHA) offers programs for government financing. 

Freddie Mac Home Possible Advantage vs FHA

  •          Home Possible Offers - 97% LTV        
  •          Allows for non-occupying co-borrowers
  •          Does not require minimum reserves
  •          Allows down payment from sources other than from applicant
  •          Income cannot be greater than 100% of median income in higher income areas
  •          No cap on percentage of median income if property located in underserved areas
  •          At closing, the buyer cannot own other property
  •          Mortgage insurance is around $123 on $100,000 loan (payment varies via several factors)
  •          Mortgage insurance cancels if value grows to 22% equity, payments made on time and area is not depreciating
  •          Allows for Lender Paid Mortgage Insurance (LPMI – Possible higher rate, but possible lower payment)
  •          Homebuyer Education required
  •          Allows for down payment assistance
  •          Minimum score of 660 requirement

 

FHA

  •          FHA offers – 96.5% LTV
  •          Allows for non-occupying co-borrowers
  •          Does not require minimum reserves
  •          Allows down payment sources other than from applicant
  •          No cap on income, however there is a cap on the loan amount per county
  •          At closing, buyer can own other property
  •          Mortgage insurance is lower because a portion of insurance is financed into the loan
  •          Mortgage insurance never cancels
  •          LPMI not allowed
  •          No Homebuyer Education required
  •          Allows for down payment assistance
  •          No minimum score requirement (score set by lender)
John Pusa
Glendale, CA

Bill Polack Thanks for the information on the difference between Freddie Mac vs FHA.

Jan 25, 2016 08:37 AM