While disappointing to hear of this program going away, we still have several great options for first-time homebuyers and those with little money down. We will be able to honor any loans that were in process with the 2% grant but we will be unable to offer it going forward, effective immediately. Freddie released the following industry-wide statement on their decision:
DEFINING RESPONSIBLE LENDING WITH CHANGES TO LENDER GIFT AND GRANT REQUIREMENTS
Freddie Mac remains committed to working with our customers, and the industry, to provide effective sustainable solutions to make homeownership accessible to more Borrowers with limited down payment savings.
To ensure we continue to provide responsible financing options, we will change our requirements for Home Possible® Mortgages, including Home Possible Advantage Mortgages. Gifts or grants from the Seller as the originating lender will only be permitted after a contribution of at least 3% of value (i.e., the lesser of the appraised value or the purchase price) is made from the Borrower’s personal funds and/or other permitted sources of funds, including a gift from a Related Person, funds from government agencies, employer housing programs and Affordable Seconds. This 3% contribution requirement is an important factor in creating a responsible, sustainable homeownership opportunity. Gifts or grants from the Seller must not be funded directly or indirectly through the Mortgage transaction, including differential pricing in rate, discount points or fees.