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HeritageOne FAQ

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  1. Why did Freddie Mac introduce HeritageOne?

    Freddie Mac made a commitment to develop a conventional mortgage product to support members of federally recognized Native American tribes in Indian country. HeritageOne is our solution to address the need for greater access to mortgage financing for these communities.

  2. How does Freddie Mac determine tribal eligibility?

    Freddie Mac provides two options for a federally recognized Native American tribe to be considered eligible:

    1. The tribe is included in HUD’s most recent Section 184 Participating Tribes List.
    2. The tribe has entered into a memorandum of understanding with Freddie Mac.
  3. How do I obtain approval to sell HeritageOne mortgages to Freddie Mac?

    Lenders must have certain terms of business (TOBs) with Freddie Mac to sell HeritageOne mortgages to us. Contact your Freddie Mac account executive for additional information. If you don’t have an account executive, call the Customer Support Contact Center (800-FREDDIE) for information on how to apply.

  4. Do all HeritageOne borrowers need to occupy the home being purchased?

    No. Non-occupying borrowers are permitted on mortgages for 1-unit properties, including manufactured homes, so long as at least one borrower occupies the property as the primary residence. For 2- to 4-unit properties, though, all borrowers must occupy the property as their primary residence.

  5. Do all borrowers for a HeritageOne mortgage have to be tribal members?

    No, but at least one borrower must be an enrolled member of a federally recognized Native tribe who will occupy the property as the primary residence.

    Note:  The borrower cannot be a Native tribe or its instrumentality.

  6. What are the qualifying income limits for HeritageOne?

    Borrowers are not subject to maximum income limits.

  7. When obtaining an appraisal for a HeritageOne mortgage, must the appraiser use the sales comparison approach for the opinion of market value?

    No. For market areas without a sufficient number of comparable sales to develop a fully supported and sufficiently documented opinion of market value using the sales comparison approach, an appraisal that relies solely on the cost approach for the opinion of market value is acceptable, under certain conditions.

  8. Can a lender give a gift or grant to assist with a HeritageOne borrower’s down payment and/or closing costs?

    Gift or grant funds provided by the Seller as the originating lender are allowed, provided that a contribution of at least 3% of the property’s value (unless the property is a manufactured home which requires a 5% down payment) is made from borrower personal funds and/or other eligible sources of funds.

  9. By way of example, for 1-unit properties, what are some of the acceptable sources of funds for use towards the 3% down payment?

    In addition to the borrower’s own funds, a borrower can receive assistance in reaching the minimum 3% down payment on a 1-unit property  from other eligible sources of funds, which include, but are not limited to, a related person, a governmental or non-governmental agency (including an agency that is a Native tribe or its instrumentality), an Employer Assisted Homeownership (EAH) program and Affordable Seconds®

    Note: The borrower is not required to use personal funds toward the 3% down payment for a 1-unit property. See Guide for additional information.

  10. May I use premium financing to fund the down payment?

    No. Down payment assistance can’t be funded through the mortgage transaction in any way, including through points, price, fees or any activity that might be described as premium financing.

  11. Do HeritageOne borrowers need to complete a homeownership education program?

    Homeownership education is required only for a home-purchase mortgage where all occupying borrowers are first-time homebuyers. The borrower must complete the homeownership education program before the mortgage’s note date. See Guide Section 5103.6 for other requirements related to homeownership education.

  12. If applicable, how can the borrower fulfill the homeownership education requirement?

    Homeownership education may be provided by HUD-approved counseling agencies, housing finance agencies (HFAs), Community Development Financial Institutions (CDFIs), mortgage insurance companies or other programs that meet National Industry Standards for Homeownership Education and Counseling. Borrowers may also choose to take Freddie Mac’s free homeownership education course, CreditSmart® Homebuyer U.

    Note: Although Guide Section 5103.6(a)(i) provides otherwise, a Native CDFI may provide the required homeownership education, even if the Native CDFI is the originating lender and/or the seller.

  13. What help is available to a borrower who seems to be struggling to make monthly mortgage payments?

    Except as detailed below, a seller or servicer must provide early delinquency counseling to borrowers who have problems meeting their mortgage obligations. The counseling may be provided by a nonprofit, third-party homeownership counseling agency, a HUD-approved national counseling agency specified by Freddie Mac or the servicer itself. For details, refer to Guide Section 9101.2: Servicer collection efforts for Mortgages secured by Primary Residences.

  14. What if the tribe offers its own Early Delinquency Counseling?

    If the servicer knows or reason to believe that the tribe, a Native CDFI, and/or a tribally designated housing entity associated with the applicable tribe has established program requirements to offer its own early delinquency counseling and/or has already offered early delinquency counseling to a delinquent borrower on a HeritageOne mortgage, then the Servicer is not required to offer early delinquency counseling. However, the servicer must document the basis for not offering early delinquency counseling in the mortgage file if it is not required to offer such counseling.