Freddie Mac will purchase mortgages secured by a property owned by an individual and rented to a group home for people with disabilities.
The U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA) issued a joint statement Wednesday to make that clear. The clarification was needed after a HUD investigation of a mortgage lender who had refused to loan to a homeowner who rented his property to a company that operated a group home.
The lender’s refusal was based on the incorrect belief that Freddie Mac would not agree to purchase the mortgage.
After HUD reported the misunderstanding to Freddie Mac and FHFA, Freddie Mac worked with both agencies and finally agreed to review their policies and make the announcement to clarify that Freddie Mac has always been willing to purchase group home secured mortgages.
“Clarifying these policies regarding group housing eligibility for the secondary mortgage market is an important step in fulfilling the promise of the Fair Housing Act to provide individuals with disabilities equal access to housing opportunities,” said the Secretary of HUD, Marcia L. Fudge. “We appreciate our colleagues at the FHFA, who share our goal of promoting fair housing and worked closely with us and Freddie Mac to help clarify these policies.”
FHFA Director Sandra L. Thompson was equally grateful. “Group homes provide opportunities for people with disabilities to live in community with neighbors and access important opportunities for independent living,” said Thompson. “We are proud to support HUD to ensure that all people have fair access to housing, recognizing that diverse experiences contribute to communities prospering.”
Group homes, which are protected by the Fair Housing Act, are dwellings occupied by people with unrelated disabilities and provide opportunities for ongoing interaction and socialization in a family setting.
The agencies said this week’s guarantee that Freddie Mac will purchase group home secured mortgages, where the property is owned by an individual, should encourage lenders to extend credit for such mortgages, providing more community life opportunities for People with disabilities.
Group homes must still meet other eligibility requirements applicable to other transactions to be eligible for purchase by Freddie Mac, the agencies said.
HUD and FHFA recently signed a Memorandum of Understanding (MOU) to cooperate on fair housing and fair lending issues, and to strengthen oversight of Fannie Mae, Freddie Mac, and the primary mortgage market.