Home Possible Mortgages
Offers Flexible Credit Terms and Low Down Payment Options
Freddie Mac's Home Possible® Mortgages offer outstanding flexibility and options to meet a variety of borrowers' needs. With Home Possible, you'll capitalize on opportunities to meet the home financing needs of borrowers looking for low down payments and flexible sources of funds, including first-time homebuyers, move-up borrowers, retirees, families in underserved areas, recent immigrants, very low and low- to moderate-income borrowers.
- 1- to 4-unit primary residences
- Manufactured homes (with additional requirements)
|Eligible Mortgage Products
- Fixed-rate mortgages with an original maturity not greater than 30 years.
- Adjustable rate mortgages (ARMs) including 5/1 (2/2/5 caps), 7/1, and 10/1 nonconvertible ARMs with an original maturity not greater than 30 years on 1- to 2-unit primary residences
- Home Possible Mortgages with Rural Housing Service (RHS) Leveraged Seconds meeting the requirements in Single-Family Seller/Servicer Guide (Guide) Chapter 35
|Maximum LTV/TLTV Ratios
- Values used to determine LTV and TLTV for Home Possible Mortgages are calculated according to the requirements in Guide Section A34.10.
- A borrower's credit reputation is acceptable if the Home Possible Mortgage receives a risk class of Accept.
- If a Home Possible Mortgage does not receive a risk class of Accept, the mortgage may be eligible as a manually underwritten mortgage if Loan Prospector® returns:
- An evaluation status of Incomplete
- A risk class of Caution, but the repository file used to create the selected borrower's credit report contains inaccurate credit information as specified in Guide Section 37.5 (c)
|Down Payment Requirements
- Minimum down payment:
- 1- to 4-unit primary residences: 5 percent of value
- Manufactured homes: 5 percent of value
- Homeownership education is required before the note date for at least one qualifying borrower if all borrower(s) are first-time homebuyers.
- Homeownership education must be provided by a party not involved in the sale or financing of the property; if provided by the originating lender or by the Seller, the homeownership education must be conducted by someone not directly involved in the loan origination, processing, or approval process.
- A copy of Exhibit 20, Homeownership Education Certification, or another document containing comparable information must be retained in the mortgage file. The following types of homeownership education are acceptable:
- Internet-based homeownership education programs that have been developed by mortgage insurance companies
- Homeownership education programs that meet the standards of the National Industry for Homeownership Education and Counseling
- Programs using the Freddie Mac CreditSmart® financial education curriculum, provided modules 1, 2, 7, 11 and 12 are included.
- Servicing-Released Cash
- Servicing-Retained Cash
- WAC ARM Cash
- Fixed-Rate Guarantor
- WAC ARM Guarantor
- MultiLender Swap
Use Freddie Mac's selling system for easy secondary market sale.
- Special postsettlement delivery fees are applicable to Home Possible Mortgages. See Guide Exhibit 19 for more details.
|Special Delivery Requirements
- See Guide Section 17.18(b) for special delivery instructions for Home Possible Mortgages.
|Single-Family Seller/Servicer Guide
- Refer to Guide Chapter A34.
Download a Home Possible Mortgage fact sheet for more details.
Home Possible Mortgages help you:
- Expand your borrower base and tap new markets such as low- and moderate-income borrowers, first-time homebuyers, recent immigrants, and underserved communities.
- Leverage a continuing, competitive, and affordable option, with high-LTV lending for borrowers with strong credit.
- Enhance your Community Reinvestment Act- (CRA) eligible originations.
Benefits for Your Borrowers
Home Possible Mortgages provide your borrowers with:
- Stable monthly mortgage payments with fixed-rate mortgages
- Flexible closing cost funding options
- Reduced mortgage insurance coverage levels
- No cash-out refinancing
For More Information
Visit The Learning Center for live and recorded web conferences, access to classroom-style workshops and self-study tools – all designed to help you stay competitive, serve more borrowers and make it easier to do business with us.
The information in this document is not a replacement or substitute for information found in the Single-Family Seller/Servicer Guide and/or the terms of your Master Agreement and/or Master Commitment.
CreditSmart – Steps to Homeownership Tutorial
Help your buyers satisfy their Home Possible homeownership education requirement with CreditSmart – Steps to Homeownership. Learn More