Freddie Mac’s Home Possible program was created to offer low down payment mortgage options for first-time homebuyers with moderate incomes. This loan only requires a 3% minimum down payment, reduced mortgage insurance rates and premiums, more flexible credit terms, and even refinancing options for existing homeowners.
How Do I Qualify for a Home Possible Mortgage?
To qualify for a Freddie Mac Home Possible mortgage, you must meet the debt-to-income ratio for this program. Typically, this means that a maximum of 43% to 45% of your gross income goes toward your monthly debts. Some lender may allow higher ratios if you have compensating factors.
Your income must fall within the stated guidelines, based on the location of the home. The fastest way to confirm this is to use the eligibility tool on the Freddie Mac website. The tool takes into account the median income for households in the area around the home.
You must also be considered a first-time homebuyer. This doesn’t mean that you’re excluded if you’ve owned a home in the past. As long as you haven’t been on the loan or title for another property within three years of applying to Home Possible, you are considered a first-time homebuyer.
Lastly, you must complete an approved homebuyer education course. At least one borrower is required to complete a Freddie Mac-approved homebuyer education course prior to the loan closing. Courses are available online and in-person, and the courses provide valuable information and insights.