HFA Advantage®
The Freddie Mac HFA Advantage® mortgage is a conventional mortgage product available exclusively to housing finance agencies (HFAs) seeking strategic solutions to diversify their product offerings and portfolio mix while expanding homeownership responsibly.
HFA Advantage Mortgage Features
Freddie Mac is continually offering solutions to advance affordable homeownership which is why we’ve added new enhancements to HFA Advantage to help you qualify more very low, low- and moderate-income borrowers.
Whether your HFA is a Freddie Mac Seller/Servicer or sells through one or more Freddie Mac Seller/Servicer partners, HFA Advantage offers enhanced flexibility for maximum financing.
Who is HFA Advantage® for?
- Borrowers who qualify for HFA homeownership programs.
- First-time homebuyers, repeat buyers and borrowers seeking no cash-out refinances.
- Borrowers purchasing or refinancing one- to four-unit properties, manufactured homes, condominiums, homes in planned unit developments (PUDs), and CHOICEHomes®.
HFA Advantage Overview Video
Watch our new video and discover how HFA Advantage expands homeownership opportunities for very low-, low, and moderate-income borrowers.
HFA Advantage Mortgage Features
- Borrower Eligibility/Borrower Profile
- At least one borrower must occupy the property as their primary residence
- Non-occupying borrower(s) are permitted for one-unit properties only
- HFAs establish their own income limits and down payment assistance
- Homeownership and landlord education per HFA program or CreditSmart® Homebuyer U, as applicable
- Use of Loan Product Advisor® recommended for broader product flexibility
- AUS alternatives in lieu of Loan Product Advisor considered
- Pricing
- Competitive standard credit fee in yield (i.e., guarantee fee)
- Loan-level credit fees are waived for HFA Advantage mortgages with the exception of the Custom Mortgage Insurance Credit Fee in Price, if applicable
- Cash & Guarantor executions
- Long-term contracts that may be amended subject to 90 days advance notice
- Mortgage Insurance
- Minimum MI coverage required for HFA borrowers earning 80% AMI or less
- Custom MI® available for borrowers earning more than 80% AMI subject to a credit fee in price
- Lender-paid and financed mortgage insurance premiums permitted
- Property Type/Eligible Properties
- One - to four-unit primary residences
- Condominiums
- Planned Unit Developments (PUDs)
- Accessory Dwelling Units (ADU)
- Manufactured homes, including manufactured homes that are CHOICEHomes® as described in Freddie Mac Single-Family Seller/Servicer Guide (Guide) Section 5703.16
- Maximum LTV Ratios
- One-unit primary residences, maximum 97% loan-to-value (LTV) and 105% total loan-to-value (TLTV) ratios with Affordable Seconds®
- Two- to four-unit primary residences, maximum 95% LTV and 105% TLTV ratios with Affordable Seconds
- Manufactured homes: Maximum 95% LTV and 95% TLTV ratios
- Non-occupant borrower(s): Maximum 95% LTV and 105% TLTV ratios on one-unit primary residences only
- Special Requirements
OWNERSHIP OF OTHER PROPERTIES
The occupying borrower(s) must not have an ownership interest in more than two financed residential properties, including the subject property, as of the Note Date, or for Construction Conversion and Renovation Mortgages as of the Effective Date of Permanent Financing.
QUALIFYING RATIOS
There is no maximum monthly housing expense-to-income ratio. Maximum debt payment-to-income ratio:
- Determined by Loan Product Advisor
- Manually underwritten mortgages: 45%
BORROWER CONTRIBUTION AND RESERVES
- One-unit primary residences do not require a minimum borrower contribution from borrower personal funds
- Two- to four-unit primary residences require a 3% contribution from borrower funds and/or other eligible sources of funds
- No reserves required unless Loan Product Advisor determines reserves are necessary to offset other underwriting factors
Growing Your Business
From valuable training and networking events to advanced tools and applications that help you work smarter, Freddie Mac has the resources you need to expand into new markets and grow your revenues.
Additional Resources
Resources for Borrowers
Reaching and educating borrowers – and helping them find the right mortgage – is essential for your business. Freddie Mac provides an array of materials you can share with your clients and business prospects.