Freddie Mac to help unemployed mortgage borrowers in high-need areas get a job

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Mortgage financier Freddie Mac on Thursday announced a program to help unemployed homeowners find a job, part of the federally required initiative known as “Duty to Serve” that requires Freddie and its counterpart Fannie Mae step up their efforts to serve low- and moderate- income communities.

In particular, Duty to Serve directs the two enterprises to improve their activities in manufactured housing, rural housing and preservation of existing affordable housing.

The new initiative builds on a 2015 pilot program between Freddie and job-placement firm NextJob. That pilot included 700 participants, of whom half were considered long-term unemployed. Qualified participants averaged nearly two years without a job before entering the program, a Freddie spokesman told MarketWatch, but within a few months of completing the program, 43% found jobs.

Freddie will again work with NextJob, as well as local partners including CDC of Brownsville, Texas, and HOPE Enterprise Corporation of Jackson, Mississippi.

Also read: Why do underwater homeowners keep paying the mortgage?

Duty to Serve specifies particular “high-need areas,” including parts of Appalachia, the lower Mississippi Delta, and certain areas known as “persistent poverty counties.” In Cameron County, Texas, for example, home to one of the local partners for the program, the jobless rate was 6.2% in April, while one county over, Willacy County, had an unemployment rate of 11.1%, compared to the statewide average of 4.1%.

Freddie says it will work with servicers of its “Home Possible” mortgages — low-down payment loans for low- and moderate-income borrowers — to determine which homeowners may be eligible. When approved borrowers are engaged with NextJob, they will be able to receive job coaching and access to a job search training program.

Separately, partner organizations may refer prospective borrowers to receive employment or re-employment services through the program.

Also read: Life Happens: How people on the lower rungs of the economic ladder get help as they pursue the American Dream