Freddie Mac pulls back on loans with extra-low down payments
One percent down on a new home loan? Zero down? Generous gifts of thousands of dollars from mortgage companies to help you swing the deal?
If any of these sounds attractive to you, here’s a little sobering news: One of the country’s two largest mortgage sources is eliminating them.
In a surprise move, giant investor Freddie Mac announced that it is ending purchases of certain low-down-payment loans that include lender contributions to the buyers’ down payments.
Mat Ishbia, president and chief executive of United Wholesale Mortgage, a large national lender and an early proponent of super-low-down-payment loans, told me his company’s approach has been to provide “true gifts” — up to a $5,000 maximum — from the start.