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Home Loan Comparisons

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Ideal Home Loans Review

Ideal Home Loans has been lending since 2001 and seems to have a professional approach to the process. They offer many types of home loans, for occupation as well as investment, which they encourage. The list includes conventional & jumbo loans, FHA Loans, VA Loans, fixed & adjustable rates, 10 to 30 year terms, full qualifying & streamline re-financings,first-time buyers, home remodels, 2nd/vacation homes, and debt consolidation. There website is well balanced between information and usable digital tools. The language is accessible to the non-expert in financial affairs, but most of the descriptions tend to be bullet points.

Ideal Provides Lists and Calculators to Simplify the Process

When a lender makes a decision about a mortgage application, they consider many basic factors: all based on your ability to repay the loan. To ensure your loan is truly affordable, a lender will verify your employment and income. Next they will consider your monthly “Debt to Income” ratio which consists of your total income, minus monthly credit payments and other debts will also be considered.The paperwork you will need to gather will include pay stubs, tax forms and bank statements at minimum. Next, they will place great emphasis on your credit score which they see as representing your willingness to pay back your debts. This is where your credit history can become relevant and they sound like they are willing to consider those with past credit issues. Ideal provides a document list so you can prepare before engaging with a loan counselor and start getting a sense of what goes into the calculus.

Speed and Technology with Expert Guidance

Ideal presents themselves as making a good mix of new technology and personal contact with well informed specialists who will explain all the details. Although there are some tools that can help you make some assessments on your own, but some external research that gives you more information on the specific conditions and terms of borrowing.

ICICI Bank Home Loans Review

ICICI offers a host of home loan options that can be tailor made to suit individual needs. With advantages like simplified documentation, usage of tablet and smartphones, getting a home loan sanctioned has become very easy  The advantages of ICICI’s services are identified as attractive floating and fixed interest rates options, higher loan eligibility, longer tenure and lower Equal Monthly Installments, loan sanction possible before selecting the property, doorstep service, and simplified documentation.

Website Accessibility and Clarity

The ICICI website is very detailed and descriptive. The language they use, however, is definitely only designed for a mathematician or an accountant. Under the very clear label “Service Charges and Fees (nonrefundable) is this information,”0.50% – 1.00% of the loan amount or Rs. 1500/- (Rs. 2000/- for Mumbai, Delhi & Bangalore), whichever is higher + applicable Service Tax & Surcharge” This is not a real attempt at transparency but rather the illusion of transparency. The organization and basic information is not unclear, but not especially explanatory. Remember, all retail home loan companies charge you for the privilege of their expertise and service in setting up, evaluating and processing the loan application. There is some hint about the “cost” of the loan from the percentage difference between the interest rate and the APR – since the APR is legally required and must be provided to account for the lending institution’s charges, although not all charges are required to be included. Finding out what those costs are is very relevant to your eventual financial obligation and more importantly how much upfront money it costs to get the loan.

Specializing in Speed and Technology

This company seems interested in clients who might not necessarily be able to get a conventional loan or a government sponsored loan. They may just be nerds and just bad at communicating, but it’s probably worth proceeding cautiously.

Huntington Bank Home Loans Review

Founded in 1866 as The Huntington National Bank, today Huntington Bancshares Incorporated still operates from the same Columbus, Ohio founding location in the heart of the Midwest. As of July 21, 2017, Huntington Bancshares Incorporated is a $101 billion asset regional bank holding company. They lend to individuals, small businesses and commercial entities.  They divide their individual loans by purchasing, home equity loans and refinancing loans. They list many options for home loans, many specialty discount programs and elite loans that are defined by the financial situation of the client and the value of the property.

A Slew of Specialty Loans and all the Federal Programs Available

Huntington Bank offers loan options include fixed rates, adjustable rates, jumbo mortgages, FHA loans, VA loans, USDA loans, state bond, employee relocation programs and third party lending services. They have a very well organized website, with clear divisions and accessible language. Each of the loans listed here has a subsection description that is a short list of the benefits of that particular loan. All of the comparisons are made in general terms, as opposed to specifically in relation to the client’s particular financial situation.

Your Financial Situation will Shape Your Choice

When a lender makes a decision about a mortgage application, they consider many basic factors: all based on your ability to repay the loan. To ensure your loan is truly affordable, a lender will verify your employment and income. Next they will consider your monthly “Debt to Income” ratio which consists of your total income, minus monthly credit payments and other debts will also be considered.The paperwork you will need to gather will include pay stubs, tax forms and bank statements at minimum. Next, they will place great emphasis on your credit score which they see as representing your willingness to pay back your debts.

Housing and Urban Development Home Loans Review

Housing and Urban Development is the umbrella agency that houses the Federal Housing Authority and as such all home loans that are government guaranteed are both HUD and FHA loans. These types of mortgages are federally insured programs designed to provide affordable housing options to first-time homebuyers and low-to-moderate-income borrowers who may not be able to qualify for a conventional mortgage. There are various types of FHA or HUD loan programs available to potential homebuyers, including fixed rate, adjustable rate, graduated payment, and reverse mortgages.

Qualifying for a HUD or FHA Loan

When it comes to income qualification criteria for an FHA or HUD loan, no specific income minimum or credit score is required, but borrowers should be able to provide a 3% down payment and demonstrate a steady employment and income history for the past two years.

The biggest benefit of FHA loans is that their more flexible finance terms, less strict credit standards, and lower down payment requirements and closing costs allow borrowers unable to qualify for traditional mortgage loans to start buying instead of renting. The structure is similar to the Veterans Administration loans that waive all down payments for veterans and their families, although these loans require 3% down.

FHA or HUD loan Limitations and Drawbacks

There is a cap on the amount the FHA will loan per house, based on a percentage of the median regional home prices, so naturally that amount varies from state to state. Any home that exceeds 80% of the median home price is considered a jumbo loans and not eligible for FHA financing. Any loan that has to go through another layer of bureaucratic approval will also involve more paperwork and waiting than the average conventional loan. The HUD or FHA loan also charges a one percent origination fee and is added to the loan received.

Honolulu HomeLoans Home Loans Review

Aames Funding Corporation is based in Los Angeles, CA, and is also known as Aames Home Loan Corporation. They are a retail loan and broker company that provides sub-prime home mortgage equity loans. The company originates loans through its retail and broker office networks and through the Internet and telemarketing. Aames Funding is based in Los Angeles, California. The company is a subsidiary of Aames Financial Corp. and has no BBB profile or rating in spite of its alleged 68-year tenure as a business. They are listed in the Ripoff Report as a company that is designed to scam desperate homeowners that have gotten in over their heads by dangling unrealistic refinance possibilities and string the borrower along in order to extract fees for their “services.”

Your Financial Status and Loan Options with Honolulu HomeLoans

When a lender makes a decision about a mortgage application, they consider many basic factors: all based on your ability to repay the loan. To ensure your loan is truly affordable, a lender will verify your employment and income. Next they will consider your monthly “Debt to Income” ratio which consists of your total income, minus monthly credit payments and other debts will also be considered.The paperwork you will need to gather will include pay stubs, tax forms and bank statements at minimum. Next, they will place great emphasis on your credit score which they see as representing your willingness to pay back your debts.

Viewing Your Options

Their loan options include conventional loans with fixed rates, adjustable rates, jumbo mortgages, FHA loans, VA loans, USDA loans and down payment loans for first time buyers. Each has its own characteristics and the sight provides short descriptions with pros and cons bulleted under each description. Each has its own characteristics but they are all subject to evaluation in relation to your own financial situation. Beyond that, there are the costs of the loan as far as fees and service charges. Those costs are not as clearly described or centered in this company’s description of their services. Remember, all retail home loan companies charge you for the privilege of their expertise and service in setting up, evaluating and processing the loan application.

Home Savings Home Loans Review

The Home Savings Bank of Wapakoneta, Ohio was established in June 1941 as a state chartered mutual savings and loan association. Since inception the primary function of the company has been to provide a safe depository for savings dollars and to use those deposits to provide affordable home loans to the residents of Auglaize County. As Wapakoneta’s only locally owned and operated financial institution, Home Savings offers “old fashion friendly personal service.” They have added many new services like Internet Banking, ATM/Debit cards, checking accounts, IRA’s and home equity lines are a few of the new products available to customers. The fact that Home Savings considers these services “new” gives borrower’s an idea of the style of service the bank will provide.

Down Home Service and Expertise

Home Savings divides their loans into four categories: home mortgages, home equity loans and lines of credit, lot loans, construction loans and commercial real estate loans. They go in to no more detail than that on their website, which essentially is laid out similarly to a print ad in a magazine. The only sign of the times is that Home Savings has one mortgage calculator. The terms, conditions and service charges are never described for any of the loans. No interest rate charts or APRs are shown. This is traditional as well: the business of home mortgages is described and driven by the loan counselors at the bank who are the experts in the loan options.

What to Ask About

Remember, all retail home loan companies charge you for the privilege of their expertise and service in setting up, evaluating and processing the loan application. Finding out what those costs are is very relevant to your eventual financial obligation and more importantly how much upfront money it costs to get the loan.

Home Savings and Loan Kenton Ohio Home Loans Review

Home Savings and Loan of Kenton Ohio offers to work with clients in many different types of home buying circumstances, including fIrst time buyers, clients buying a new home, clients building a new home, refinancing client’s  current home or using the client’s  home equity for cash. The company also offers many kinds of financial products, including home loans. Their loan options include fixed rates, adjustable rates, jumbo mortgages, FHA loans, VA loans, USDA, conventional mortgage loans with 30 year terms, as well as renovation and construction loans. Each has its own characteristics but they are all subject to evaluation in relation to your own financial situation.

Taking Stock of the Client’s Financial Situation

When a lender makes a decision about a mortgage application, they consider many basic factors: all based on your ability to repay the loan. To ensure your loan is truly affordable, a lender will verify your employment and income. When a lender makes a decision about a mortgage application, they consider many basic factors: all based on your ability to repay the loan. To ensure your loan is truly affordable, a lender will verify your employment and income. Next they will consider your monthly “Debt to Income” ratio which consists of your total income, minus monthly credit payments and other debts will also be considered.The paperwork you will need to gather will include pay stubs, tax forms and bank statements at minimum.

Mortgage Loans with Personal Service Emphasis

Remember, all retail home loan companies charge you for the privilege of their expertise and service in setting up, evaluating and processing the loan application. There is some hint about the “cost” of the loan from the percentage difference between the interest rate and the APR – since the APR is legally required and must be provided to account for the lending institution’s charges, although not all charges are required to be included. Finding out what those costs are is very relevant to your eventual financial obligation and more importantly how much upfront money it costs to get the loan.

Home Savings and Loan Co. of Youngstown Home Loans Review

Home Savings and Loan Company of Youngstown is a full service savings and loan institution, with all sorts of financial services that they offer to individuals and businesses. Their loan options include fixed rates, adjustable rates, jumbo mortgages, FHA loans, VA loans, reverse mortgage loans, down payment loans for first time buyers,  renovation and construction loans. Each has its own characteristics but they are all subject to evaluation in relation to your own financial situation.

Web Presence is Up to Date and User Friendly

Their website is very well arranged and organized. The site includes a very detailed information about each of the above loan options, as well as  descriptions of what the borrower must provide to justify a loan. But beyond that, the website explains what the relevant factors are that the lender considers beyond the individual’s financial situation. They help their customers by providing many tools to assess your loan potential. However, the specifics are necessary to assess your actual loan potential. Even though the APR is designed to present the actual cost of obtaining financing, by requiring that some but not all closing fees are included in the APR calculation, it is important to assess the difference between upfront money and the overall cost of the loan. Comparing APRs across loan companies cannot tell you which loan to acquire without considering these factors.

Some Undescribed Points of Interest

The Mortgage Resources and Information Center provides some very good basic information presented in a very usable manner, like their list of necessary documents. The Federal Truth in Lending law requires that all financial institutions disclose the APR when they advertise a rate. The APR is designed to present the actual cost of obtaining financing, by requiring that some, but not all, closing fees are included in the APR calculation. These fees in addition to the interest rate determine the estimated cost of financing over the full term of the loan. Since most people do not keep the mortgage for the entire loan term, it may be misleading to spread the effect of some of these up front costs over the entire loan term.

Home Loan Savings Bank Home Loans Review

Home Loans Savings Bank is a small operation in the sense that they are only working in Ohio. They are a full-service bank, including lending, savings and checking account options, IRAs, CDs, health savings, and money market accounts. They also offer a wide array of investment services through the Home Loan  Financial Services. They are primarily focused on providing long term service for their clients as opposed to gaining new accounts. The goal of the bank is to provide a wide array of services to their existing clients.

Personalized Service

Specifically, the home loan program repeats the same principles as the home page of their website. Unfortunately,  they go into very little detail about the actual conditions of any of the loan packages they provide. Their emphasis on face-to-face service and personal service is in some ways echoed by the sparseness of their website. There are zero details about the type of home loans they offer or the terms they represent. The website describes their loan services with the same language of personalized service, with a focus on their specific understanding of the limited geographical area that they serve. They do say that they offer competitive rates for building, purchasing, or refinancing for primary residence, vacation homes, and investment properties. There is a certain sincerity in their lack of information, since most home loans are tailored to individual borrower’s financial status and potential.

Factors in Achieving a Loan

When a lender makes a decision about a mortgage application, they consider many basic factors: all based on your ability to repay the loan. To ensure your loan is truly affordable, a lender will verify your employment and income. Your monthly Debt to Income ratio – your total income, minus monthly credit payments and other debts — will also be considered.  Home Loan Savings Bank does offer an online application process, but how it is set up and how you get to the application requires a direct meeting with a loan counselor.

Home Depot Project Home Loans Review

All Home Depot Project Home Loans are designed to last 84 months and are based on a project to improve customer’s  primary residence. They must be applied for with the assistance of a home depot representative, so borrowers must go to the Home Depot to apply for the loan. There are several requirements that go with the loan, like spending it through a Home Depot line of credit process. Monthly payments are initially not represented in terms of interest rates or APRs, rather they are flat monthly payments based on the amount borrowed. The amounts of the loans range from $2,500.00 – $55,000.00.

Conditions for Achieving a Project Home Loan

Aside from a credit check and a project description, the loan only covers “qualifying purchases” made on The Home Depot or Expo Design Center Consumer Credit Card, The card carries an 17.99%-26.99% APR. Minimum service charge: $2. There is a 6 month window created for the purchase of products or installation services. There is no explanation of what constitutes a qualifying purchase. Home Depot makes money at all ends of the deal, for the sale of the products and services you buy, the interest rate you will pay if you don’t use the money to pay off the credit card purchase, the fees and service charges associated with applying for the loan and 7.99% APR on the total amount of the loan.

Other Options to Consider for Homeowners with Equity

If you are a homeowner and already have a mortgage, it might be much more viable to seek a home equity loan from your existing financial institution. They very well may offer you a more reasonable rate as well as the freedom to choose your own materials, your own material providers and service providers for any home project you are attempting to complete.

Home Affordable Refinance Program (HARP) Home Loans Review

The Home Affordable Refinance Program was created to help borrowers and home lending institutions deal with market fluctuations represented by the housing market crash. Their help comes in the form of assuming some of the risk that lending institutions take when offering refinance loans to folks who have suffered as a result of the housing market’s crash. The Federal Housing Finance Agency continues to shape new programs to deal with society-wide housing issues, like their new refinance program introduced in 2016.

An Evolving Program to Help Homeowners Refinance Beyond Normal Loan Requirements

In the interest of helping homeowners who bought and borrowed at the top of the market before the housing crash, the The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises), at FHFA’s direction, will implement a new refinance offering aimed at borrowers with high loan-to-value (LTV) ratios.  The new refinance offering will provide much-needed liquidity for borrowers who are current on their mortgage but are unable to refinance through traditional programs because their LTV ratio exceeds the Enterprises’ maximum limits.  The FHFA Director Melvin L. Watt said,  “This new offering will give borrowers the opportunity to refinance when rates are low, making their mortgages more affordable and thus reducing credit risk exposure for Fannie Mae and Freddie Mac.”

HARP Will Probably be Extended Through September 30 2017

HARP continues to be one of the most successful crisis-era programs with more than 3.4 million homeowners already having refinanced their mortgage.  More than 300,000 U.S. homeowners could still refinance through HARP between now and October 1, 2017. To ensure that high LTV borrowers who are eligible for HARP will not be without a refinance option while the new refinance offering is being implemented, FHFA is creating a what they refer to as a bridge program by also directing the Enterprises to extend HARP through September 30, 2017.

Franklin American Mortgage Company Home Loans Review

Franklin American Mortgage Company is based in Franklin, Tennessee with offices throughout the country. The company is FHA Direct Endorsed, VA Automatic, a LAPP authority and a Fannie Mae, Freddie Mac and Ginnie Mae Approved seller/servicer. Founded in 1994, Franklin American Mortgage Company (FAMC), a privately-held mortgage banking firm located in Franklin, Tennessee, is a full-service professional mortgage banker licensed to provide residential mortgages across the nation. FAMC offers a host of diverse and flexible mortgage packages for customers with a variety of backgrounds and needs. They claim to be committed to helping families and individuals achieve the dream of homeownership through its three divisions: retail, wholesale and correspondent.

Correspondent and Wholesale Programs

Neither of these programs serve individual homeowners but do serve mortgage brokers, real estate agents, contractors and home builders. Aside from the Wholesale Program is a direct relationship between the builder, seller or purveyor of homes. The company’s Correspondent Lending division was designed to service small to large lenders across the nation. The Correspondent Lending division was created to provide high-quality services and products to these institutions and their customers. This will help smaller lenders compete with larger “mega banks” in an increasingly tight market. All of these benefits are directly pitched to real estate and construction professionals.

Individual Home Loans and Little Information

Franklin American claims to be a primarily direct home lending institution. However, there is little to no specific information about the loans that this institution offers. The terms and conditions are not posted nor are they described in any detail. Rather, Franklin American claims to deal with all the elements of the loan in house, with all underwriting performed in house as well. This singular service provider should make it easier to understand the actual cost of processing the loan. There are less actors to pile on fees, deposits and service charges. They no doubt offer a full range of government guaranteed or assisted loans, as is evident from their credentials.

Flat Branch Home Loans Review

Flat Branch Home Loans offers a variety of mortgage products, including the basics like conventional loans, FHA loans, VA loans, USDA loans. They have in-house underwriting, which allows us to provides clients with a consistent level of customer service throughout the entire loan application process and claim to keep your loan and service it in house after closing.  There is certainly something to be said to be consistently working with the same institution throughout. Such an arrangement reduces the borrower’s  concerns to the singular contractual relationship with one service provider. Of course that usually implies a local lender, which is exactly what flat branch is: a Missouri based retail home loan institution.

Example of a Custom Loan Program

Flat Branch Home Loans offers a fair number of different loan programs from the usual offerings. For example, they have first time home buyer deals, downpayment loan and grant options, as well as a Homeready Program that is offered through Fannie Mae. It has some of the same advantages as other government housing programs that lower credit requirements and lower the debt to income ratio required to allow low income applicants to borrow. When a lender makes a decision about a mortgage application, they consider many basic factors: all based on your ability to repay the loan. To ensure your loan is truly affordable, a lender will verify your employment and income. Your monthly Debt to Income ratio – your total income, minus monthly credit payments and other debts — will also be considered.

The Regulatory Environment

Because regulation of financial institutions is not a very politically popular issue, institutions will be more likely to provide government backed loans to those with less statistical chance of being able to pay them back. Conversely, this flexible quality is also the company’s strength, since many people without a down payment or with nontraditional employment are very good risks to take.

First Horizon National Corporation Home Loans Review

The First Horizon National Corp. offers regional banking, wealth management, and capital market services through their First Horizon “family of companies.” Their companies include more than 170 First Tennessee Bank and FTB Advisors locations in and around Tennessee and 27 FTN Financial offices in the U.S. and abroad. They offer their services to individuals, businesses, corporations and institutions. This review will concern itself with the home loans offered to individuals through the First Tennessee Banks.

Loan Options Offered to Clients Through Personal Service

Unlike other banking institutions, the First Tennessee Bank does not pretend to be able to educate their clients about home loans beyond the most elementary level. They have a website that describes their financial products in the sparsest of terms to encourage their clients to depend on the expertise of their loan counselors. They do not specifically list the types of mortgage loans that are supported by the bank. Rather, they describe their loan offerings in the broadest of terms. They claim to offer flexible terms, flexible payment options, a strong, lasting commitment to customer service. Beyond that they promise to provide clients with dedicated, knowledgeable loan officers, an easy-to-understand loan process and competitive terms, whatever that may mean.

Hard to Compare Loans and Costs without the Details

The costs of the loan as far as fees and service charges are not as clearly described or centered in this company’s description of their services as their broad claims of superiority. Remember, all retail home loan companies charge you for the privilege of their expertise and service in setting up, evaluating and processing the loan application. The Federal Truth in Lending law requires that all financial institutions disclose the APR when they advertise a rate. The APR is designed to present the actual cost of obtaining financing, by requiring that some, but not all, closing fees are included in the APR calculation. These fees in addition to the interest rate determine the estimated cost of financing over the full term of the loan.

Fellowship Home Loans Review

This particular lending institution identifies itself through its alleged application of Christianity and its values to its business practices. In other words, they claim to be more interested in doing “good” for their clients rather than merely pursuing profit. It is obviously not possible in a review to assess what their Christian commitment means to the borrower. It is only through applying for a loan that the details of the actual contract can be assessed. However, the general idea of preparing to buy a home or refinancing seems the same.

Your Income and the Home Loan

When any lender makes a decision about a particular borrower’s mortgage application, they consider many basic factors: all based on your ability to repay the loan. To ensure your loan is truly affordable, a lender will verify your employment and income. Your monthly Debt to Income ratio – your total income, minus monthly credit payments and other debts seems to be of great importance to Fellowship Home Loans. They claim that they put their values above profits and provide all sorts of examples of how they are charitable and informative. Their message is often bent toward assuring potential borrowers that the Fellowship Bank will not seek out those who are unable to afford a home.

Get with the Times

This appeal is common today since so many people were misled by unscrupulous lenders into loans they could neither afford nor escape. They claim to keep abreast of the market’s changes and help their clients know what to expect financially. They offer a full complement of loans including FHA and VA government options, as well as HARP. There copy on the website seems to be from 2010, since they seek to allay the fears of those who think that homes don’t increase in value. Time to update the website.

Federal Housing Authority Home Loans Review

Housing and Urban Development is the umbrella agency that houses the Federal Housing Authority and as such all home loans that are government guaranteed are both HUD and FHA loans. These types of mortgages are federally insured programs designed to provide affordable housing options to first-time homebuyers and low-to-moderate-income borrowers who may not be able to qualify for a conventional mortgage. There are various types of FHA or HUD loan programs available to potential homebuyers, including fixed rate, adjustable rate, graduated payment, and reverse mortgages. If a loan certified for FHA insurance later defaults, the holder of the loan may submit an insurance claim to the FHA for the losses resulting from the defaulted loan.

Qualifying for a HUD or FHA Loan

When it comes to income qualification criteria for an FHA loan, no specific income minimum or credit score is required, but borrowers should be able to provide a 3% down payment and demonstrate a steady employment and income history for the past two years. The biggest benefit of FHA loans is that their more flexible finance terms, less strict credit standards, and lower down payment requirements and closing costs allow borrowers unable to qualify for traditional mortgage loans to start buying instead of renting. The structure is similar to the Veterans Administration loans that waive all down payments for veterans and their families, although these loans require 3% down.

FHA Loan Benefits and Limitations

FHA loans allow a maximum loan to value (LTV) of 96.5% on a 1-2 unit property, the down payment may be comprised of all gift funds with non-occupying co-borrowers allowed
Loans can be used in conjunction with eligible government down payment assistance programs.
Non-traditional credit is allowed but property must be owner-occupied. Loans are capped at 80% of the regional median house price, allowing for price fluctuations from region to region.

Federal Home Loan Mortgage Corporation (Freddie Mac) Home Loans Review

The Federal Home Loan Mortgage Corporation is a companion agency/company that was designed to compete with the Federal National Mortgage Association (Fannie Mae) because of both of the entities ever-changing status as either private companies or some type of government entity or quasi-government entity. They were created to have a specific macroeconomic effect on the housing market and their status as a governmentally subsidized agency or a privately traded company has been debated since their collective inception.

Freddie Mac and Fannie Mae are both MBS Buyers and Sellers

Freddie Mac’s primary method of making money is by charging a guarantee fee on loans that it has purchased and securitized into mortgage-backed security (MBS) bonds. Investors, or purchasers of Freddie Mac MBS, are willing to let Freddie Mac keep this fee in exchange for assuming the credit risk. That is, Freddie Mac’s guarantee that the principal and interest on the underlying loan will be paid back regardless of whether the borrower actually repays. Because of Freddie Mac’s financial guarantee, these MBS are particularly attractive to investors and, like other Agency MBS, are eligible to be traded in the “to-be-announced,” or “TBA” market.

Government Supported Free Market Entity?

Ironically, the idea that Freddie Mac is somehow a more secure source of secondary loan market products is based in a myth of government support: they receive no direct federal government aid. However, the corporation and the securities it issues are thought to benefit from government subsidies. The Congressional Budget Office writes, “There have been no federal appropriations for cash payments or guarantee subsidies. But in the place of federal funds the government provides considerable unpriced benefits to the enterprises. Government-sponsored enterprises are costly to the government and taxpayers. The benefit is currently worth $6.5 billion annually.”

Federal Home Loan Bank of Topeka Home Loans Review

Federal Banks are different than regular commercial banks. Membership is by banks as opposed to membership by individuals. However, as the name implies, they do have both direct and indirect effects on the housing market in the form of stabilizing programs that help member banks deal with market volatilities. The details of their programs are very sophisticated and mostly deal with providing financial flexibility in cash flow and interest rate fluctuations. Indirectly, these programs have assisted thousands of households nationwide with their home financing needs.

Supporting Community Development

Federal Banks also enter the market and directly help their member institutions through their Homeownership Set-aside Program (HSP) which provides down payment, closing cost and repair assistance to first-time homebuyers earning at or below 80% of the Area Median Income for households purchasing or constructing homes in Colorado, Kansas, Nebraska and Oklahoma. HSP is provided to households as a forgivable grant with a five-year retention period. This program is a partnership with FHLBank members. Members work with qualified homebuyers, submit documents to FHLBank, provide the grant funds at closing and request reimbursement of the funds after closing. Community Investment Program advances (or loans) that allow members to fund affordable housing while maintaining profit margins and minimizing risk.

Supporting Affordable Housing

Last year the Federal Home Loan Bank of Topeka approved more than $7 million in affordable housing program grants throughout Colorado, Kansas, Nebraska and Oklahoma in 2016. This year program offers a maximum subsidy per project for 2017 is $750,000. The application period opens on May 15, 2017 and must be submitted by midnight CST, June 30, 2017. FHLBank will announce approved projects no later than December 29, 2017. If awarded, the grant will provide financing for owner-occupied and rental housing to address the needs of very low-, low-, and moderate income households.

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