Company: FMCCN
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001026214-25-000040
Chunk: 56

Company: FEDERAL HOME LOAN MORTGAGE CORP
Filing Date: 2025-02-13
Form: 10-K
Item: Item 15
Chunk 56
---
 housing in a responsible manner. Our purchase guidelines generally provide for:

n    A maximum original LTV ratio of 97% for creditworthy first-time homebuyers and for a targeted segment of creditworthy borrowers meeting certain AMI requirements under our affordable housing initiatives;

n    A maximum original LTV ratio of 95% for all other home purchase and no cash-out refinance loans; and

n    A maximum original LTV ratio of 80% for cash-out refinance loans.

FREDDIE MAC  |  2024 Form 10-K51

Management's Discussion and AnalysisRisk Management

Our ability to assess the credit quality of our Single-Family mortgage portfolio and loan acquisitions could be adversely affected by changes resulting from the COVID-19 pandemic. The CARES Act required creditors to report to credit bureaus that loans in relief programs, such as forbearance plans, repayment plans, and loan modification programs, are current as long as the loans were current prior to entering into the relief programs and the borrowers remain in compliance with the programs. In addition, the Department of Education provided borrowers of federal student loans with additional assistance, such as forbearance plans and other debt relief programs, and suspended the delinquency reporting to the credit bureaus until 4Q 2024. As a result, credit scores may not fully reflect the impact of relief programs, offered by us or other creditors, into which borrowers may have entered during the affected periods.

Loan Advisor is our main tool for assessing loan eligibility and documentation. Loan Advisor is a set of software applications and services designed to give lenders access to our view of risk, loan quality, and eligibility during the origination process. As a component of Loan Advisor, Loan Product Advisor® (LPA) helps lenders validate that submitted loans meet our underwriting standards. 

Substantially all of the loans we purchase are assessed by Freddie Mac's proprietary underwriting software tools, LPA or Loan Quality Advisor®, prior to purchase, helping validate their compatibility with our risk appetite. Any loans that are not assessed by Freddie Mac’s proprietary underwriting software are manually underwritten by the seller in accordance with Guide requirements.

We offer limited representation and warranty relief for certain loan components that satisfy automated data analytics related to appraisal quality, valuation, borrower assets, borrower income, borrower employment status, and certain condominium project requirements. In general, limited representation and warranty relief is offered when information is validated through the use of independent data sources and/or Freddie Mac analytics and risk assessments.

If we