New American Funding and Alterra Home Loans are partnering on a new loan program using Freddie Mac's low-down-payment Home Possible mortgages.
Called Your Path, the pilot program was designed to expand affordable homeownership opportunities and meet the changing demographics of borrowers. To accomplish this, the lenders will consider a wider range of factors than in a traditional underwriting scenario, such as seasonal and self-employment and multigenerational households.
"We recognize that borrower demographics are changing and that traditional underwriting methods don't account for some of today's borrower characteristics," Danny Gardner, Freddie Mac's vice president of affordable lending and access to credit, said in a news release Monday.
Gardner also noted that Freddie Mac was conducting the pilot with New American and Alterra "to evaluate underwriting features that account for borrower preferences, household formation trends and other financial considerations."
The Your Path program comes on the heels of other work being done to address issues related to demographic change and homeownership. Last month, New American created the New American Dream program, which aimed to increase homeownership in African-American communities through educational programs and increased access to certain loan programs.