When exploring Michigan home loans, many borrowers assume that Fannie Mae and Freddie Mac guidelines are identical. While they often look similar on the surface, there are important differences that can directly impact your loan approval, qualification, and overall borrowing power.
- Primary residences
- Multi-unit properties
- First-time homebuyers
- Self-employed borrowers
Property Value Risk (SSR Scores)
Both agencies use automated valuation models that assign a property risk score, but their thresholds are different.
- Fannie Mae: A score of 2.5 or higher triggers a desk review
- Freddie Mac: A score of 3.5 or higher triggers a desk review
If your property falls into a higher-risk category, Freddie Mac may offer more flexibility before requiring additional appraisal review, potentially helping avoid delays in closing.
Asset Depletion Guidelines
Asset-based qualification is especially useful for retirees and high-asset borrowers in Michigan.
- Fannie Mae:
- Up to 70% LTV
- Can go to 80% LTV if borrower is 62+
- Freddie Mac:
- Up to 80% LTV
- Borrower must be 62+
Michigan Insight
For borrowers under 62, Fannie Mae may be the only option for asset depletion. For those over 62, both programs can work, but structuring matters.
Deferred Student Loans
Student loan treatment can significantly impact your debt-to-income ratio (DTI).
- Fannie Mae: Uses 1% of the loan balance
- Freddie Mac: Uses 0.5% of the loan balance
For Michigan borrowers with large deferred student loans, Freddie Mac can result in a lower calculated monthly obligation, improving your chances of qualifying.
Commission, Overtime, and Bonus Income
Income stability requirements differ between the two agencies.
- Fannie Mae: Requires at least 12 months of receiving this income
- Freddie Mac: Requires 2 full years
If you recently started earning commissions or bonuses, Fannie Mae may allow you to qualify sooner, making it the better option in many cases.
Maximum LTV for 3–4 Unit Primary Residences
Multi-unit properties are popular in Michigan, especially for borrowers looking to offset mortgage costs with rental income.
- Fannie Mae: Up to 75% LTV
- Freddie Mac: Up to 80% LTV
Opportunity for Michigan Buyers
Freddie Mac allows higher leverage for 3–4-unit properties, which can reduce your upfront investment and increase your purchasing power. We work with multiple agencies, including FHA/VA, and have a dedicated department for our Non-QM home loan programs for Michigan homebuyers and homeowners.
