New Mortgage Program Targets The Underserved


Freddie Mac, in partnership with New American Funding (NAF) and Alterra Home Loans, has launched Your Path, a new loan program targeting the underserved market.

The program is geared toward self-employed workers and seasonal employees who might not have the same level of documentation for income and assets that traditional, full-time workers have when applying for a mortgage.

Lenders participating in the program will be able to offer loans to qualified borrowers with a shorter secondary income history, as well as multi-generational families with multiple sources of income.

The program also gives consideration for non-traditional income sources, Freddie Mac, NAF and Alterra Home Loans stated in a joint press release.

“We have a passion for making sure everyone has an equal opportunity to achieve the American Dream,” said Patty Arvielo, president of NAF. “That’s why we’re excited to work with Freddie Mac to create a greater pathway to homeownership for more people.”

“By collaborating, we can put what matters most first, better serving underserved consumers and helping them build wealth through homeownership,” added Jason Madiedo, CEO of Alterra Home Loans. “We are excited to partner with Freddie and NAF in this effort.”

Interestingly, the firms point out that it is necessary for these loans to be underwritten using a mix of automated and manual underwriting.

“[In order to provide] access to credit for more consumers to enjoy the benefits of homeownership, [lenders] must use both automated and manual underwriting, which allows underwriters to individually review a borrower’s financial profile in order to make sure qualified buyers aren’t denied access to credit opportunities,” the release stated.

This need for manual underwriting is, in part, why Freddie Mac decided to work with New American Funding and Alterra Home Loans, the companies say.

These lenders were selected, Freddie Mac said, “because of their demonstrated track record in effectively evaluating creditworthiness for the broader public.”

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William M. LeRoy
William M. LeRoy

When pie in the sky politics replace sound business practices as a fundamental driver of the single family mortgage industry, we can only expect additional upheavals. This approach has been tried and failed.