This post will contain the more in-depth details of Freddie Mac’s Home Possible Program. There are two versions of the Home Possible program, each with different perks. The first is the regular Home Possible program, and the second is called the Home Possible Advantage Program. In the upcoming sections, we will be breaking down the differences between the two, if any.
- 1 Minute | No Hard Credit Check
Freddie Mac’s Home Possible and Home Possible Advantage
Freddie Mac’s Home Possible and Home Possible Advantage Programs are both tailored towards the lower-to-medium income households. The Loan-to-Value or LTV requirements, flexible down-payment options, and Property-types approved by the program all are examples of how this program aims to make purchasing homes more affordable.
The maximum loan to value for the Home Possible and Home Possible Advantage Programs are 95% and 97%, respectively. The loan to value is a mortgage term showing the ratio between the loan for the home, and the value of the home. This relationship shows that lenders will approve of a loan that covers at a maximum of 95% or 97% (depending if the program is Home Possible or Home Possible Advantage) of the price, making a higher-value home more attainable. This also means the borrower needs to make a 5% minimum down-payment for Home Possible, or a 3% minimum down-payment for Home Possible Advantage.
Available Property Options For This Loan Program
The available property types for both Home Possible and Home Possible Advantage programs are condos and planned unit developments. Planned Unit Developments, also known as PUDs, are communities of homes, such as single-family homes or condos. Home Possible also allows for purchase of 1-4 unit properties and, under stricter guidelines, certain manufactured homes. Home Possible Advantage only allows for purchase of 1 unit properties and will not allow manufactured homes to be purchased.
Another perk of these programs is the flexible down-payment options. Home Possible and Home Possible Advantage allow for non-borrower sources, such as family and employers. While the down-payment must be at least 5% for Home Possible, and at least 3% for Home Possible Advantage programs, these funds can come from gifts from non-borrower sources.
In the next update, we’ll discuss the advantages of Mortgage term flexibility, income options, mortgage insurance cancellation, and more that both Home Possible and Home Possible Advantage programs offer.
- 1 Minute | No Hard Credit Check
