Home Possible – Freddie Mac’s New 3% downpay program
A new option for first-time homebuyers and those who want to keep down payments low. Low-to-moderate income buyers will be interested in this program.
Freddie Mac’s Home Possible AdvantageSM common questions:
Do I qualify?
Buyers must meet minimum credit requirements, A credit score of 660 is required for Home Possible Advantage mortgages underwritten manually by a lender.
Other qualification criteria includes earnings (earn no more than 100% of area median income) and buyers must have downpayment funds matching minimum requirements set by the program, along with funds for closing costs. First-time homebuyers must participate in an acceptable borrower education program, like Freddie Mac’s CreditSmart.
Are gift funds allowed for down payment?
Yes! Your down payment can come from a number of sources, including personal funds, gift funds, grants and affordable second mortgages.
Will I have to pay private mortgage insurance (PMI)?
Yes, without at least a 20% down payment require some form of credit enhancement or insurance, usually in the form of PMI.
Freddie Mac took some heat recently for the creation of the program from those accusing the mortgage underwriting giant of once again putting buyers in homes they can’t afford. Representatives for Freddie Mac defend the program as being well balanced between risk and off-setting measures.
Fannie Mae also offers a 3% down payment loan option. It rolled out in late 2014.