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Module 8: Avoiding Credit Traps - Freddie Mac

Module 8: Avoiding Credit Traps - Freddie Mac 2025

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The document is an instructor's guide for Module 8 of Freddie Mac's CreditSmart® initiative, focusing on avoiding credit traps. It provides educators with resources and strategies to teach participants about predatory lending, costly business practices, identity theft, home equity loans, and prepayment penalties. The module aims to enhance financial literacy and help consumers make informed decisions to protect their credit and financial well-being.

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We have answers to the most popular questions from our customers. If you can't find an answer to your question, please contact us.

What is a Freddie Mac SBL loan?

The Freddie Mac Small Balance Loan (SBL) program offers apartment financing in amounts between $1 million and $7.5 million. Loan terms typically include: Loan Sizing: $1 million minimum, $7.5 million maximum. Uses: Purchases or refinances of stabilized multifamily properties. Amortization: Up to 30 years.

What is the Freddie Mac special purpose credit program?

Freddie Mac BorrowSmart Access is an SPCP that allows qualified clients in eligible counties to receive $3,000 in down payment assistance. Some standard requirements for conventional loans apply, including the need for a 620 qualifying credit score and a DTI no higher than 50%.

What is the Freddie Mac program?

Freddie Mac is a government-sponsored enterprise or GSE, created by the federal government to ensure access to home mortgage credit.

What does SPCP mean in mortgage terms?

Special purpose credit programs (SPCPs) are home loan programs designed to help remove the barriers to homeownership in underserved populations. SPCPs can help empower communities to build wealth and housing stability.

Does Freddie Mac allow no credit score?

For Mortgages where no Borrower has a Credit Score, Loan Product Advisor will apply the following requirements: The transaction must be a purchase or no cash-out refinance Mortgage. The Mortgaged Premises must be a 1-unit property, occupied by all Borrowers as their Primary Residence.

Which type of loan does not meet the Borrower credit requirements of Fannie Mae and Freddie Mac?

A non-conforming mortgage is a mortgage that does not meet the guidelines of government-sponsored enterprises (GSE) such as Fannie Mae and Freddie Mac and, therefore, cannot be sold to them.

What metrics does Freddie Mac consider in its underwriting process?

The underwriting of the Borrowers creditworthiness and capacity (e.g., Borrowers income, Borrower credit/liabilities and Borrower assets) or Borrower eligibility and qualification (e.g., Area Median Income, First-Time Homebuyer, lawful presence in the United States)

What credit score do you need for a Freddie Mac loan?

Credit score. Both Fannie Mae and Freddie Mac require a minimum credit score of 620 for fixed-rate mortgages. However, you may need a higher credit score for certain loan programs or to obtain better interest rates.

Module 8: Avoiding Credit Traps - Freddie Mac 2025

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