If you are a credit-worthy borrower that just doesn’t have a large down payment, you may be a good candidate for the Home Possible program. This Freddie Mac program provides you with conventional financing while only requiring a 3% down payment.
Learn the income and property eligibility guidelines to determine if you are a good candidate for this loan.
Home Possible Income Requirements
The Freddie Mac Home Possible program is geared toward low and moderate-income families. It is supposed to help these families realize homeownership despite not having a large amount of money to put down on the home.
Just what does Freddie Mac consider low income? In general, you can’t make more than 100% of the average median income for the area. This is the case unless you live in a low-income census tract. If you do, there aren’t any restrictions regarding how much income you can make.
You can figure out if you qualify for the program, using this link to Freddie Mac. On the map, enter the address of the property you would like to purchase. The program will then show you the Home Possible Income Limit as well as 80% and 50% of the limit. You can also click to see if the property is eligible for down payment assistance.
It’s important to know that you can only use borrower income to qualify for the loan. This means only the people on the loan. If you live with someone that isn’t on the loan, their income doesn’t count.
Home Possible Property Requirements
You can use the Freddie Mac Home Possible program on a large variety of home types including:
- 1-4 unit properties
- Manufactured homes
No matter the home type, you must live in the property as your primary residence. This program is not for second mortgages or investment homes. In fact, it is only for first-time homebuyers, which Freddie Mac considers anyone that hasn’t owned a home before or those that have not owned a home in the last three years.
If you purchase one of the types of homes from above, you only need a 3% down payment and you can have a credit score as low as 620 in many cases. This makes it much easier for a large number of people to secure financing for a home than ever before.
Just as is the case with any loan program, it pays to shop around. We recommend that you get quotes from at least three lenders so that you know the average rate and closing costs for the area. After you compare your options, you can choose the loan that suits your financial needs the most.