Freddie Mac HomeOne Mortgage Program | Conventional 3% Down
Are you looking for low down payment options for a conventional loan? The Freddie Mac HomeOne mortgage program allows as little as 3% down payment. The HomeOne mortgage does not have income limits like other 3% down conventional loan programs.
Advantages of the Freddie Mac HomeOne Mortgage Program
The HomeOne mortgage program gives the ability to purchase a home with a 3% down payment with a conventional loan regardless of geographic location or income limits.
- Allows up to 105% combined loan-to-value with Affordable Seconds.
- Eligible for single family homes, townhouses, and condos.
- No minimum borrower contribution is required.
- Avoid FHA’s upfront mortgage insurance premiums.
- Unlike government insured loans, the mortgage insurance may be cancelled once the property reaches 20% equity.
- Conventional appraisal standards are often more lenient on property condition than FHA minimum property requirements.
Origination and Underwriting Requirements
- One borrower must be a first time homebuyer when the mortgage is a purchase transaction.
- One unit properties (including Planned Unit Developments (PUD) and condominiums).
- Fixed rate mortgages.
- Credit and capacity is determined by the Automated Underwriting System – Loan Product Advisor.
- Gift funds are acceptable from family members.
Freddie Mac Homebuyer Education Course
An online program known as CreditSmart is a free interactive tutorial, which borrowers are required to participate in a home ownership education course. Borrowers may use other acceptable programs for the homeownership education course.
First Time Home Buyer Defined
- 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.
Home Possible and HomeReady Mortgage 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.
- 2-4 unit conventional financing available up to 95% loan-to-value with borrower occupying one unit.
Income Limits for Home Possible and HomeReady
The HomeReady mortgage was meant to meet the diverse needs of buyers for creditworthy low to moderate income borrowers.
- Use the Home Possible Income and Property Eligibility tool to see if you qualify based on income and property location.
- Fannie Mae also has a Area Median Income Lookup Tool for the HomeReady mortgage program.
- 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.
To obtain a pre-approval letter, you should start by contacting a licensed Loan Originator. They will put together a list of documentation required for underwriting and processing, go over your case scenario, and determine your eligibility by running the Automated Underwriting System.
You will be able to go over mortgage options, mortgage payments, and eligibility with them. Depending on the Automated Underwriting System results, they will be able to issue you a pre-approval letter the same day.