3% Down: More Questions Answered
Since lenders will soon begin taking applications, today we're answering more:
Do I have to be a first-time homebuyer?
No, Home Possible Advantage is available to all eligible low- and moderate-income borrowers – including first-time homebuyers.
Do I have to live in the house or can I use this mortgage to buy a rental property?
Home Possible Advantage mortgages require the borrower to live in the home.
Am I required to get housing counseling?
To qualify for Home Possible Advantage, first-time homebuyers (borrowers who've had no ownership in a residential property during the last three years) are required to participate in an acceptable borrower education program, like Freddie Mac's CreditSmart®.
What if my credit is less than the 660 requirement?
A credit score of 660 is required for Home Possible Advantage mortgages (680 for refinances) that are underwritten manually by a lender. However, we expect the majority of these loans to be underwritten using our automated underwriting system Loan Prospector – which assesses a prospective loan’s eligibility for sale to us based on our credit guidelines.
Loan Prospector provides the broadest opportunity to participate in Home Possible Advantage because it
considers compensating factors to determine eligibility. So weakness in one area – like a lower credit score – does not necessarily disqualify a borrower because one or more positive factors may compensate for another.
How do I know if I am below the media area income?
Home Possible Advantage was designed to increase access to credit for low- and moderate-income borrowers based on the Area Median Income estimates issued by the Federal Housing Finance Agency each year. See how your income compares.
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