Self-Help Secondary Market

The mission of Self-Help is to create and protect ownership and economic opportunity for people of color, women, rural residents and low-wealth families and communities. The secondary market program supports our mission by providing lenders with liquidity to lend to low-and-moderate-income borrowers. Self-Help offers an alternative credit enhancement for banks looking to sell loans to Fannie Mae. Self-Help’s saleable, no-MI loan product is simple and easy for lenders to work with, while providing borrowers a lower mortgage payment than other saleable financing choices.

The Self-Help Loan Product

Self-Help Borrower Profile

• Average Area Median Income: 62%
• Minority: 40%
• Female-headed households: 42%
• Rural community residents: 13%
  

Self-Help loans have the following features:

• No Mortgage Insurance
• Purchase money and limited cash-out refinance
• Saleable
• CRA qualifying, targeted at low- and moderate-income borrowers
• Similar to Fannie Mae’s “My Community Mortgage”
• 30-year fixed rate
• 97% LTV/CLTV
• Eligible for Desktop Underwriter or Manual underwrite
  

Self-Help Programs: Flow and Portfolio

Lenders may sell new originations to Self-Help through our flow program, an outlet for conforming loans without mortgage insurance. This relationship assures lenders of a ready buyer for all new originations made to low- and moderate-income borrowers under our program.

For lenders already holding non-conforming loans, Self-Help offers a portfolio program through which we purchase selected loans based on our underwriting guidelines.

Requirements

To partner with Self-Help, the following criteria should be met:

• Fannie Mae seller/servicer
• Retail originations
• Borrower income at or below 80% of area median income (AMI) or 115% AMI in low and moderate income or minority census tracts. Fannie Mae’s Property GeoCoder can identify if a borrower qualifies.
• Borrower must have a FICO score of 620 or greater.
  
• Lenders retain servicing rights, earning the standard servicing fee of 25 basis points.
• New lenders are required to hold credit risk for the first 6-12 months.
  

Where Self-Help fits in

Self-Help gives lenders more flexibility by providing a saleable, no-MI product that is CRA-qualifying and serves low-and-moderate income markets.

Program History and Results

Since its founding in 1994, the secondary market program has purchased more than $4.5 billion in affordable mortgage loans, helping more than 50,000 families.

In 1998, the Ford Foundation awarded to Self-Help its largest domestic grant to date when it committed $50 million to provide risk capital for the program. Under this groundbreaking partnership with the Ford Foundation and Fannie Mae, Self-Help has expanded the secondary market program to serve low-income borrowers in 48 states around the nation.

Our Role in the Marketplace

Lender originates loan to low-and-moderate income borrower

Participating Lenders sell these loans to Self-Help, either through the

portfolio or

flow program. Private mortgage insurance is unnecessary for Self-Help loans because Self-Help provides a credit enhancement.

Self-Help sells loans to Fannie Mae with Self-Help recourse.

Participating Lenders use the extra liquidity to continue lending in low- and moderate-income neighborhoods.

Fannie Mae pools the loans and sells them in the open market as mortgage-backed securities.

Investors receive payments on the securities.

* No MI     * Saleable     * CRA Qualifying     * 97% LTV