Freddie Mac’s new mortgage product that allows borrowers to put down just 3 percent is off to a strong start, says Freddie Mac’s Chief Executive Donald Layton.
Lawmakers had expressed concern about Freddie Mac’s 3 percent down payment option loans, which debuted in March, arguing that it could lead to losses at the government-backed company. The Federal Housing Administration also supports low down payment loans but requires more insurance from home owners than Freddie Mac’s.
By the end of June, Freddie Mac’s post-2008 business has increased to 63 percent of its single-family credit guarantee portfolio. Also, its single-family serious delinquency rate – loans that have payments late by 90 days or more — stood at 1.53 percent in the second quarter, the lowest since November 2008 and below the national rate of 4.24 percent.
Source: “New 3%-Down Mortgage Off to ‘Good Start,’ Freddie Mac Chief Says,” MarketWatch (Aug. 4, 2015)