Freddie Loosens Guidelines for Hurricane Areas

Freddie Mac late last week loosened some of its underwriting guidelines to help lenders better serve homebuyers in disaster areas affected by hurricanes Katrina and Rita.The mortgage investing giant told its seller/servicers that temporary income -- including severance pay and unemployment assistance -- can be used to qualify borrowers as long as their income will "likely" be restored to a level supporting "the long-term obligations" of a mortgage. On a negotiated basis, Freddie also will allow for higher loan-to-value ratios. For Hurricane Katrina victims the changes only apply to mortgages with note rates dated on and after Aug. 30 through Oct. 3. For Rita victims, the eligible note dates are on and after Sept. 25 through Oct. 3. Freddie Mac can be found online at http://www.freddiemac.com.