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Alt 97 Mortgage
Flexible down payment options for your borrowers

Related Products

Freddie Mac's Alt 97® Mortgage is a powerful offering that can help you reach more borrowers with good credit but limited savings for a down payment. With Alt 97, your first-time homebuyers and move-up borrowers can move in or refinance with less cash – as little as five percent required down payment for purchase transactions coming from a combination of flexible options.

Alt 97 is designed specifically for borrowers who have worked hard to establish and maintain a strong credit history.

There are no income or geographic limits for Alt 97 Mortgages, so you can reach a wide range of borrowers with a variety of financial circumstances and access to many nontraditional sources of funds.

When you offer Alt 97, you'll add a flexible, competitive mortgage to your product line and open up more opportunities for your borrowers.

Product Features

Feature Requirements

Property Type
  • 1-unit owner-occupied primary residences, including condominiums and units in planned unit developments (PUDs).

Eligible Mortgage Products
  • 15-, 20- and 30-year fixed-rate mortgages

Transaction Type
  • Purchase
  • No-cash out refinance

Maximum LTV Ratios

  • LTV ratio equal to or greater than 90% but not greater than 95%.

Down Payment or Closing Costs
  • No minimum down payment required from borrower funds.
  • 5% down payment required, which may come from any combination of the following options:
    • Borrower's own funds, including secured borrowings, such as a 401 (k) loan.
    • A gift or unsecured loan from a related person or an agency.
    • A grant or unsecured loan from a municipality or nonprofit.
    • Funds from Individual Development Accounts (IDAs) or Community Savings Systems.
    • Employer-assisted housing funds, either in the form of an unsecured loan or a grant.
  • Borrower funds can come from other cash or equity as defined in Guide Sections 26.2 or 26.3.

Eligibility/Underwriting
  • Loan Prospector® Accept or manually underwritten mortgages
  • Minimum Indicator Score of 620 unless otherwise specified in the Guide.
  • Minimum Indicator Score of 700 for manually underwritten mortgages
  • No non-occupant co-borrowers
  • No reserves required
  • No income limits
  • Maximum debt-to-income ratio of 45 percent for manually underwritten mortgages except Streamlined Refinance Mortgages

Execution Options
  • Fixed-rate servicing-released Cash
  • Fixed-rate servicing-retained Cash
  • Fixed-rate Guarantor
  • MultiLender Swap

Delivery Fees
  • An Alt 97 postsettlement delivery fee will be assessed, in addition to other fees assessed based on the individual characteristics of the mortgage. See Single-Family Seller/Servicer Guide (Guide) Exhibit 19 [PDF 214K] for details on applicable fees.
  • A secondary financing delivery fee will not be assessed on an Alt 97 Mortgage with secondary financing.

Special Delivery Requirements
  • May be pooled with other conventional fixed-rate mortgages.

Single-Family Seller/Servicer Guide
  • Refer to Guide Chapter D33.


Download an Alt 97 Mortgage fact sheet [PDF 185K] for more details.

Lender Benefits

Freddie Mac's Alt 97 Mortgage helps you:

  • Attract a variety of borrowers with strong credit histories, including low- and moderate-income borrowers, with limited funds for a down payment.
  • Streamline your operations and diversify your offerings using Loan Prospector automated underwriting technology.

Benefits for Your Borrowers

For your borrowers, an Alt 97 Mortgage:

  • Requires only five percent down, regardless of income amount or geographic location.
  • Provides flexible financing options with down payment funds coming from a combination of nontraditional sources, and no minimum requirement from borrower funds.

For More Information

Training Opportunities

Visit The Learning Center for live and recorded web conferences, access to classroom-style workshops and self-study tools – all designed to help you stay competitive, serve more borrowers and make it easier to do business with us.

The information in this document is not a replacement or substitute for information found in the Single-Family Seller/Servicer Guide and/or the terms of your Master Agreement and/or Master Commitment.



© 2009 Freddie Mac