Freddie Mac Amends Requirements with respect to Lender Gifts and Grants under the Home Possible Mortgage Program

Freddie Mac issued an industry letter announcing changes under the Home Possible Mortgage Program with respect to a borrower’s acceptance of gifts and grants from the lender. Pursuant to the industry letter, gifts or grants from the originating lender will only be permitted after a contribution of at least 3% of value (i.e., the lesser of the appraised value or the purchase price) is made from the borrower’s personal funds and/or other permitted sources of funds (including a gift from a related person, funds from government agencies, employer housing programs and affordable seconds). In addition, gifts or grants from the lender must not be funded directly or indirectly through the mortgage transaction, including differential pricing in rate, discount points or fees. The changes went into effect July 6, 2017.

Click here to view the Freddie Mac Industry Letter