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Freddie Mac “No Credit Score” Underwriting Now in Effect
To expand homeownership opportunities to more borrowers, Freddie Mac has updated its Loan Product Advisor® to allow lenders to assess mortgages for borrowers without credit scores. The new program is effective for mortgages originally submitted on or after May 14, 2017, with settlement dates on or after June 26, 2017.
Loan Quality Advisor® will also be updated with this capability as of May 14, 2017. Requirements to allow the assessment of these mortgages include the following transaction characteristics:
- Must be a purchase or a “no cash-out” refinance mortgage.
- Must be secured by a 1-unit property and all borrowers must occupy the property as their primary residence.
- Loan-to-value (LTV), total LTV (TLTV) and Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratios must not exceed 95%.
- Must be a fixed-rate mortgage.
- Must not be:
- A mortgage secured by a manufactured home.
- A super-conforming mortgage.
If a transaction does not meet the above requirements, Loan Product Advisor® will return an incomplete message(s).