Freddie Announces Product Enhancements

Freddie Mac has announced changes in its interest-only fixed-rate mortgage product to make more IO financing available, as well as changes aimed at providing greater flexibility in its Treasury Plus Yield Maintenance Option."Freddie Mac has expanded the credit terms of its interest-only product in response to feedback from its customers and the unique challenges presented by the marketplace," said Mitchell W. Kiffe, Freddie Mac's vice president of multifamily production and sales. "The changes are twofold: Freddie Mac is providing the potential of a longer interest-only term for all loans, and it is also offering lower debt coverage ratios for certain acquisition loans with above-average fundamentals." Regarding its Treasury Plus product, the government-sponsored enterprise is offering to modify the assumed reinvestment rate in the yield maintenance formula up to the Treasury yield rate plus 100 basis points or the net spread, whichever is lower. The GSE can be found on the Web at http://www.freddiemac.com.