Freddie Mac · OTC:FMCC
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36 slides from Freddie Mac's investor presentation, Nov 5, 2010
Slide 1: Lender logo and presenter placeholder
Remove this text and place lender logo here [Name of Presenter] [Date Presented]
Slide 2: Today's Presentation
Remove this text on slide master and place lender logo here Today’s Presentation It’s a Great Time to Buy Today’s First-time Homebuyers Bridging the Gap: Down Payment and Closing Cost Resources Down Payment and Closing Cost Resources in Your Area Putting These Programs into Action for Your
Slide 3: It's a Great Time to Buy
Remove this text on slide master and place lender logo here It’s a Great Time to Buy 3 © Freddie Mac 2010
Slide 4: Low Interest Rates & Lower Home Prices Have Increased Homebuyer Affordability
Remove this text on slide master and place lender logo here Low Interest Rates & Lower Home Prices Have Increased Homebuyer Affordability Index Percent 180 18.0 NAR 30-Year Fixed Affordability Mortgage Rate Index (right scale) 150 (left scale) 14.5 120 11.0 90 7.5 Index = 100 means median income For
Slide 5: National House Prices Have Experienced a Cumulative Decline of 17% Since June 2006
Remove this text on slide master and place lender logo here National House Prices Have Experienced a Cumulative Decline of 17% Since June 2006 Quarterly Growth Rates (Numbers in Percentages) 6 5.0 5 4.2 4 3.4 2.8 3 2.3 2.6 2.4 2.1 1.8 2 1.6 1.3 0.9 0.8 1 0.4 0.0 0.0 0 -1 -0.6 -0.8 -1.3 -2 -1.9 -2.0
Slide 6: Large Inventory Surplus Remains in Market
Remove this text on slide master and place lender logo here Large Inventory Surplus Remains in Market Excess Unsold Homes for Sale (Numbers in Thousands) 1000 Annual Data Quarterly Data 900 800 700 600 500 400 300 200 100 0 Q1 Q4 Q1 Q4 Q1 Q4 Q1 Q4 Q1 Q4 Q1 -100 1996 2000 2004 2005 2006 2007 2008 200
Slide 7: Today's First-time Homebuyers
Remove this text on slide master and place lender logo here Today’s First-time Homebuyers 7 © Freddie Mac 2010
Slide 8: Market Drivers Influence Purchase Patterns
Remove this text on slide master and place lender logo here Market Drivers Influence Purchase Patterns Past Few Years (2005 – 2007) Today (2010) Summary Consumers anxious to Consumers waiting on the The demographic profile become homeowners to catch sidelines for prices to bottom of homebuyers
Slide 9: Borrower Segments Face Challenges and Heightened Anxiety
Remove this text on slide master and place lender logo here Borrower Segments Face Challenges and Heightened Anxiety Borrower Segments Challenges Universal Lack of down payment Fear of making wrong First-time Anxiety over housing prices choices Homebuyer Inability to find financing Fear of
Slide 10: First-time Homebuyers Today
Remove this text on slide master and place lender logo here First-time Homebuyers Today 2009 Homebuyer Profile First-time Homebuyer – Demographic Characteristics Share increased from 41% in 2008 to 47% in 2009 Married couple represent 50% of FTHBs Single female buyers represent 25% of FTHBs Re
Slide 11: Age of First-time Homebuyers
Remove this text on slide master and place lender logo here Age of First-time Homebuyers Homebuyer Age Age of Homebuyer First-time homebuyers are typically 18–24 6% younger than repeat buyers. 25–34 34% More than half of first-time homebuyers were between 25-34 years old. 35–44 22% Typical hom
Slide 12: Projected Population Increase, 2010–2025
Remove this text on slide master and place lender logo here Projected Population Increase, 2010–2025 Population Growth 2010–2025 Projected Population Percentage Increase, 2010-2025 Change White 55% 2010 246,630 52.38% 50% 2015 256,306 (3.92%) 46.44% 45% 2020 266,275 (7.97%) 40% 2025 276,281 (12.02%)
Slide 13: What Does This All Mean for You and Your Clients?
Remove this text on slide master and place lender logo here What Does This All Mean for You and Your Clients? Inventories are at all-time highs at lower prices, increasing affordability. There are opportunities out there to sell more homes to first-time homebuyers and grow your business. Many
Slide 14: You Are the Critical Link
Remove this text on slide master and place lender logo here You Are the Critical Link You are the critical link to helping well-qualified homebuyers achieve their homeownership objectives: Help first-time homebuyers understand home financing in new market. Guide eligible first-time homebuyers
Slide 15: Bridging the Gap: Down Payment and Closing Cost Assistance Resources
Remove this text on slide master and place lender logo here Bridging the Gap: Down Payment and Closing Cost Assistance Resources 15 © Freddie Mac 2010
Slide 16: Sources of Funds
Remove this text on slide master and place lender logo here Sources of Funds Assistance from a variety of sources is available for mortgage-ready, well-qualified first-time homebuyers who need a little bit more to bridge the gap: – Mortgage Credit Certificates; and – Down payment and closing cost
Slide 17: Sources of Funds: Mortgage Credit Certificates
Remove this text on slide master and place lender logo here Sources of Funds Mortgage Credit Certificates (MCCs). Issued by certain state or local governments (including state housing finance agencies), MCCs generally allow homeowners to claim around 20 percent of the annual interest on their mo
Slide 18: Mortgage Credit Certificates (cont'd)
Remove this text on slide master and place lender logo here Mortgage Credit Certificates (cont’d) Homebuyers who wish to obtain an MCC must meet certain minimum guidelines (restrictions may be waived by issuing entity in certain circumstances): – Must not have owned a home in the previous three ye
Slide 19: How Mortgage Credit Certificates Work
Remove this text on slide master and place lender logo here How Mortgage Credit Certificates Work Borrower receives an MCC for: 30% credit $200,000 mortgage 30-year, fixed-rate Results: Total tax credit in this example exceeds 6% interest rate IRS limit of $2,000 Homebuyer reports a $2,000 credi
Slide 20: Sources of Funds
Remove this text on slide master and place lender logo here Sources of Funds Down payment and closing cost assistance Most assistance is provided to the mortgage-ready borrower through grants and deferred seconds funded by states and local governments through: – the HOME Investment Partnerships
Slide 21: Sources of Funds: Grants and Deferred Seconds
Remove this text on slide master and place lender logo here Sources of Funds Grants Grants are funds that do not have to be paid back, but often have to be paid back if the borrower sells his or home within a certain period of time. Deferred Seconds Many down payment assistance programs come in
Slide 22: HOME Investment Partnerships Program
Remove this text on slide master and place lender logo here HOME Investment Partnerships Program Administered by HUD, HOME is the largest federal block grant to state and local governments (including housing finance agencies), and is designed exclusively to create affordable housing for low-income
Slide 23: HOME Investment Partnerships Program (cont'd)
Remove this text on slide master and place lender logo here HOME Investment Partnerships Program (cont’d) States are automatically eligible for HOME funds and receive either their formula allocation or $3 million, whichever is greater. Local jurisdictions eligible for at least $500,000 under the f
Slide 24: American Dream Downpayment Initiative (ADDI)
Remove this text on slide master and place lender logo here American Dream Downpayment Initiative (ADDI) Administered under the HOME Investment Partnerships Program, ADDI provides up to $10,000 in down payment, closing costs, and rehabilitation assistance (or 6 percent of the purchase price of the
Slide 25: American Dream Downpayment Initiative (ADDI – cont'd)
Remove this text on slide master and place lender logo here American Dream Downpayment Initiative (ADDI – cont’d) Each participating local jurisdiction receives ADDI funds from the state’s share. To be eligible for an ADDI allocation, local jurisdictions must have a total population of 150,000 ind
Slide 26: Down Payment and Closing Cost Assistance Example
Remove this text on slide master and place lender logo here Down Payment and Closing Cost Assistance Example – [Add Type of Assistance Here] XX City, XX State – [Add Name of Program Here] Describe program here USE THIS SLIDE TO PROVIDE A SPECIFIC EXAMPLE OF A DOWN PAYMENT AND CLOSING COST ASSISTAN
Slide 27: Community Development Block Grant (CDBG) Program
Remove this text on slide master and place lender logo here Community Development Block Grant (CDBG) Program One of HUD’s longest-running programs (since 1974), the CDBG provides communities with resources to address a wide range of unique community development needs including affordable housing,
Slide 28: Community Development Block Grant Program (cont'd)
Remove this text on slide master and place lender logo here Community Development Block Grant Program (cont’d) With non-entitlement Communities or State Administered CDBG (also known as the Small Cities CDBG Program), states award grants to smaller units of general local government for community d
Slide 29: Neighborhood Stabilization Program (NSP)
Remove this text on slide master and place lender logo here Neighborhood Stabilization Program (NSP) A component of CDBG, HUD provides Neighborhood Stabilization Program grants to communities hardest hit by foreclosures and delinquencies to purchase, rehabilitate, or redevelop homes and stabilize
Slide 30: Neighborhood Stabilization Program (cont'd)
Remove this text on slide master and place lender logo here Neighborhood Stabilization Program (cont’d) Eligible NSP activities can include (but are not limited to): – Direct purchase and rehabilitation of abandoned and foreclosed homes for sale, rent, or redevelopment; – Establishment of financin
Slide 31: Down Payment and Closing Cost Assistance Example
Remove this text on slide master and place lender logo here Down Payment and Closing Cost Assistance Example – [Add Type of Assistance Here] XX City, XX State – [Add Name of Program Here] Describe program here USE THIS SLIDE TO PROVIDE A SPECIFIC EXAMPLE OF A DOWN PAYMENT AND CLOSING COST ASSISTAN
Slide 32: Down Payment and Closing Cost Resources in [Insert Location Here]
Remove this text on slide master and place lender logo here Down Payment and Closing Cost Resources in [Insert Location Here] 32 © Freddie Mac 2010
Slide 33: Down Payment and Closing Cost Assistance Programs in [Insert Location Here]
Remove this text on slide master and place lender logo here Down Payment and Closing Cost Assistance Programs in [Insert Location Here] Statewide and Regional Programs: [Add here] City/County Programs: [Add here] Municipal Programs: [Add here] Counseling Agencies Providing HUD-approved Homebuy
Slide 34: [Lender: List Your Product Offerings Here]
Remove this text on slide master and place lender logo here [Lender: List Your Product Offerings Here] [Name of product] – Description… [Name of product] -- Description… CUSTOMIZE THIS PAGE TO SHOW YOUR MORTGAGE PRODUCT OFFERINGS, REQUIREMENTS, AND SPECIAL PROGRAMS. 34 © Freddie Mac 2010
Slide 35: Why Is Homeownership for Mortgage-Ready, First-time Homebuyers Still Important?
Remove this text on slide master and place lender logo here Why Is Homeownership for Mortgage-Ready, First-time Homebuyers Still Important? Owning a home still has its advantages, both personally and financially: – housing costs are more stable if the first-time homebuyer obtains a fixed-rate mort
Slide 36: Contact Information
Remove this text on slide master and place lender logo here Contact Information CUSTOMIZE THIS PAGE TO INCLUDE YOUR CONTACT INFORMATION, “800” NUMBER, NAME OF A SPECIFIC LOAN OFFICER, ETC. 36 © Freddie Mac 2010