New HomeOne Low Down Payment for First Time Home Buyers
The new HomeOne mortgage program is available to qualified first time homebuyers with a low down payment of 3%. This program is meant to expand homeownership for first time homebuyers. The HomeOne loan program is similar to the Home Possible program, but income limits do not apply to the HomeOne mortgage.
Advantages of the New HomeOne Mortgage
- The new HomeOne program gives the ability to purchase a home with a 3% down payment.
- Up to 105% combined loan-to-value with affordable 2nd.
- Most buyers may be limited to 97% loan-to-value.
- No borrower income limits.
- No property location restrictions.
- Eligible for single family homes, townhouses, and condos.
- No minimum borrower contribution is required.
Origination and Underwriting Requirements for the New HomeOne Loan
- One borrower must be a first time homebuyer when the mortgage is a purchase transaction.
- A first time homebuyer is defined by all of the following requirements:
- The borrower will reside in the mortgaged property as a primary residence.
- Purchasing the mortgaged premises.
- No ownership interest (sole or joint) during the three years preceding the date of the purchase of a residential property.
- Only one borrower on the loan needs to meet the definition of a first time home buyer.
- The property is a one unit property.
- Only fixed rate mortgage for the new HomeOne loan program.
- Reserves are determined by the automated underwriting system, Loan Product Advisor.
- Gift funds acceptable from family members.
- A online program known as CreditSmart is a free online program, which borrowers are required to participate in a home ownership education course.
- Borrowers may use other acceptable programs for the homeownership education course.
What is the Home Possible and HomeReady Program?
The Home Possible and Home Possible Advantage loan program has a 3% down payment option to focus on serving low and moderate income borrowers.
- Maximum loan-to-value is 97% for one unit properties, condos, and planned unit developments.
- 1-4 unit financing available up to 95% loan-to-value with borrower occupying one unit.
- Income limits and property eligibility can be searched by county or zip.
The HomeReady mortgage was meant to meet the diverse needs of buyers for creditworthy low to moderate income borrowers.
- Maximum loan-to-value is 97% for one-unit properties.
- 2-4 unit financing available with borrower occupying one unit.
- Borrower’s are not required to be a first time home buyer.
- The HomeReady income eligibility tool can be used for income limits.