Banks participate by originating the first and the second mortgages under the program.
Some banks sell the first mortgages to investors like Fannie Mae on the secondary market. The MHP has worked with Fannie Mae to obtain approval for the program guidelines and for the loan closing documents. The banks' ability to sell the first mortgages in the secondary market reduces bank risk over time and greatly leverages the use of bank commitments to the program. In order to make this mortgage product even more affordable to first-time buyers, many banks participating in the Soft Second Loan Program are offering first and second mortgages at one half of a percent below conventional interest rates. Communities are encouraged to negotiate the interest rate of these mortgages with participating lenders.