Interagency Home Finance Cooperative.
Common Sense Home Financing.
America's home finance industry needs scalable solutions to support a rebound in the nation's homeownership rate. The overwhelming reality is that the economic recovery has not benefited most American households to the point where they have regained the capacity to qualify for a mortgage. This is especially the case for those families that lost jobs, had financial setbacks or lost homes resulting from the Great Recession. Further, the scars from the personal experiences of Millennials who witnessed family members and friends losing homes to foreclosure will not heal quickly. Today's home finance industry needs innovative programs that safely and securely bridge households into qualified homeowners while concurrently supporting the existing residential mortgage infrastructure.
The IHFC through its partnership with Trio delivers a compelling solution to the housing crisis and establishes a permanent home financing alternative to the traditional mortgage. Refined over the last 15 years, Trio is an affordable homeownership program specializing in lease with purchase option agreements that enable a qualified consumer to select a home available for sale and finance it for one to five years until they are ready to purchase.
Every Trio lease-to-own home financing agreement is coupled with an assumable mortgage at lease inception, called an OwnOption™ Mortgage. Future home affordability is preserved via Trio's fixed purchase option price and the assumption feature of an OwnOption Mortgage securing both home price and a mortgage with an interest rate fixed at today's affordable rates. Ultimately this structure preserves affordability - extending the availability of credit servicing households until they are ready and qualified to enter into homeownership. At the same time, Trio and the IHFC mitigate risk for mortgage insurers during the highest risk period – the first five years of occupancy.
From families that lost homes during the Great Recession due to job loss, foreclosure or short-sale to first time buyers to our mobile workforce, new entrepreneurs and military personnel, Trio delivers much needed financing for households seeking stability that are between renting and homeownership.
Trio is a scalable and affordable homeownership financing program that through its public-private partnerships reduces the burden of government. Trio and the IHFC are positioned to compliment Federal agency efforts at FHFA and FHA to finance first time homebuyers and others seeking homeownership. Trio works cooperatively with the traditional real estate industry and over its history has developed programs with Fannie Mae, HUD, the U.S. Department of the Treasury, state and local housing finance agencies, and non-profit housing organizations.
Trio uses common sense underwriting to qualify its customers. It promotes approval for those recovering from impacts from the Great Recession while maintaining credit standards equal to that of government mortgage products with minimum credit scores at 580. Trio is diligent in reviewing current income and rental history, but accommodates households with new careers, new to our country, members of our military returning to the workforce and small business owners. Trio does not require a down payment at inception, but does requires a customer contribution approximating 1.5% of the home price.
An OwnOption Mortgage, included with every Trio home financing agreement, keeps homeownership within reach by fixing future mortgage interest rate and term until customers are qualified or ready to purchase.
An OwnOption Mortgage is 30 year fixed interest rate mortgage that is coupled with a Trio home financing agreement at lease inception. The OwnOption Mortgage is then assumable by customers during their lease term when they are ready and qualified to purchase. Future home affordability is thereby preserved, securing home price as well as a mortgage, with term and interest rate fixed at today's affordable rates. Ultimately, the use of Trio and an OwnOption Mortgage expands home financing options and services households until they are ready and qualified to enter into homeownership, while mitigating risk to mortgage insurers as well as security investors.
The IHFC is as a government agency participant as a mortgagor with HUD enabling FHA mortgages to work within the construct of an OwnOption Mortgage. Through the public-private partnership between the IHFC and Trio, OwnOption Mortgages are provided through third party originators with affordable pricing and 30 year fixed terms preserving future affordability.
Mortgage originators may utilize Trio and an OwnOption Mortgage to finance nearly qualified consumers that would otherwise be denied financing for their new home.