Following misunderstanding about Freddie Mac's rules for purchasing mortgages secured by group homes, the Department of Housing and Urban Development and the Federal Housing Finance Agency released a policy clarification this week.

Group homes, protected under the Fair Housing Act, are occupied by people with disabilities, with the goal of providing residents with ongoing interaction, independent living and socialization in a familial setting. According to HUD and FHFA, the assurance that Freddie Mac will purchase mortgages secured by group homes, where the property is owned by an individual, 'should encourage lenders in extending credit for such mortgages ... providing more community-based living opportunities' for people with disabilities. The clarifications were included in Freddie Mac's update to its seller/servicer guide earlier this month.

The clarifications follow a recent HUD investigation of a mortgage lender who refused to lend to a homeowner renting their property to a company operating a group home. The lender's refusal was incorrectly based on the belief that Freddie Mac would not agree to buy the mortgage. After HUD reported the misunderstanding to Freddie Mac and FHFA, Freddie Mac agreed to revise its policies and clarify that it has always been willing to buy mortgages secured by a group home.

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