Freddie Mac has expanded its affordable mortgage program to give active-duty soldiers and reservists more purchasing power when they buy a home.Under its Home Possible program, Freddie will purchase low- or zero-downpayment loans with flexible credit underwriting standards. If the borrower receives a gift from relatives or veterans' organization, the initial interest rate can be reduced by 150 basis points in the first year. This buydown of the interest rate effectively increases the soldier's or sailor's home purchasing power "by as much as 30%," Freddie Mac said in announcing its decision to expand the Home Possible program to 1.5 million military personnel. The secondary-market agency acted in response to requests by Sen. Ben Nelson, D-Neb., and the Hispanic War Veterans of America. The reduction in the interest rate is phased out over three years, and the source of the interest rate buydown funds can come from a wide range of sources, Freddie said.
