Home Possible Mortgage

About Home Possible Mortgage:

The Home Possible mortgage program was introduced by Freddie Mac in 2014 to facilitate homeownership among very low to moderate-income borrowers. Down payments can be as low as 3%, and qualified borrowers can include applicants without credit scores.1 A broadly similar program from Fannie Mae is called HomeReady.

  • Home Possible is a Freddie Mac program for low and middle-income borrowers.
  • It offers low down payments, low fees, and low mortgage insurance requirements.
  • Different types of residences are eligible for mortgages through Home Possible.
  • Borrowers have flexibility in funding their down payments.
  • The program allows lenders to expand their pool of borrowers.

Eligible Borrowers:

There are no income limits in low-income census tracts. In other census tracts, eligible borrowers will earn no more than 100% of the area median income.1 In some cases, the income limit may be 80% of AMI.

Borrowers without a credit score may qualify for a Home Possible mortgage if the loan-to-value (LTV) ratio on the property does not exceed 95%. The program is not limited to first-time homebuyers. In cases where a group of borrowers takes out the loan, at least one must occupy the property as their primary residence.

Benefits for Borrowers:

In addition to personal funds, borrowers can use various other sources to meet their required 3% down payment. Among these are gifts from related persons, funds from a governmental or non-governmental agency, employer-assisted homeownership programs, and Affordable Seconds.

Benefits for Lenders:

Freddie Mac promotes Home Possible to lenders as a means to expand their market opportunity, giving them greater access to “borrowers in a wide range of life stages from millennials purchasing their first home, to move-up borrowers and retirees considering downsizing.” Additionally, lenders are able to sell their Home Possible mortgages to Freddie Mac.

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