NCSHA Comments on Freddie Mac Single-Family Closed-End Second Mortgages
On May 22, 2024, NCSHA submitted comments to the Federal Housing Finance Agency in response to a request for comment on Freddie Mac’s proposed new Closed-End Second (CES) mortgage loan product. In its comments, NCSHA observes the CES mortgage loan product as proposed will have extremely limited use to state HFAs and the low- to moderate-income homeowners they serve largely because the down payment assistance (DPA) programs that are the hallmark of state HFA first-time and low- to moderate-income home buyer programs result in higher loan-to-value ratio loans and the DPA loans are generally in second lien position. Additionally, because the proposed CES mortgage loan product does not specify eligible uses of CES mortgage loan proceeds, it misses an opportunity to advance explicitly Freddie Mac’s Duty-to-Serve Underserved Markets activities by specifically providing liquidity to the home improvement and repair lending market.
