What is the FHLMC Home Possible® Program?
The FHLMC 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 low and moderate-income borrowers looking for low down payment and flexible sources of funds.
FHLMC Home Possible® Basics
- Designed to help low- and moderate-income households obtain homeownership through affordable financing without having to make a large down payment
- 620 minimum qualifying credit score for all qualifying borrowers
- Max LTV up to 97%, TLTV up to 105%
- 15, 20, 25 and 30 year fully amortizing fixed rate terms available
- Available for purchase or no cash out refinance
What are the benefits?
Lower Credit Scores Accepted
A borrower with FICO scores of as low as 620 may be eligible for the FHLMC Home Possible® program.
The FHLMC Home Possible® is available in 15, 20, 25 or 30 year fixed rate terms. This provides some flexibility in the amount of time borrowers have to pay off their loans.
This program offers fixed rates, allowing each borrower’s principal and interest payments to stay the same, despite fluctuations in the mortgage market.
Low Down Payment, Low Reserves
With the FHLMC Home Possible® loan, borrowers can buy a home for as little as 3% down for 1-2 unit primary residences.
- 2-Unit: 95% LTV/TLTV/HTLTV
- Manufactured homes: Refer to Freddie Mac Service Guide Chapter H33
- No minimum borrower contribution on 1 unit, as low as 3% for 2- unit properties
In which scenarios is the FHLMC Home Possible® a good option?
The FHLMC Home Possible® loan program is an ideal solution for low- to moderate-income borrowers without much cash reserves for a down payment. Here are a few specific scenarios for which an FHLMC Home Possible loan may make sense:
- A first time borrower with less-than-perfect credit and low cash reserves needing financing for a 1-unit primary residence
- A current low-income homeowner with 5%+ equity is interested in refinancing in order to reduce their mortgage interest rate and/or monthly mortgage payment
- A borrower who meets all income/debt/asset requirements is purchasing a duplex and intends to live full-time in one unit and rent the other unit out
Buying a Home with an FHLMC Home Possible® Loan
Borrowers can purchase a home with the FHLMC Home Possible® program by meeting the necessary eligibility requirements for the program. Financing through the FHLMC Home Possible® program allows borrowers who are in moderate to low income brackets to buy a home with up to 97% LTV.
For the Home Possible program, borrowers will need to first evaluate if they meet the income restrictions for their area. Income limits vary by location.
Once income qualification has been established, the borrower and lender can proceed as normal through the rest of the loan process.
FHLMC Home Possible® Refinancing
Borrowers can utilize a no cash out refinance option through the FHLMC Home Possible® program. Cash out refinancing is unavailable for this program.
Other Programs to Explore
If the FHLMC Home Possible® loan doesn’t work for the scenario you have in mind, perhaps one of these programs will be a better option:
- FHLMC Fully Amortizing Fixed Rate & Super Conforming, for conventional and jumbo financing needs, plus a cash-out refinance option
- FHLMC HomeOne is a low down payment solution helping more first-time home buyers achieve the milestone of homeownership — regardless of income levels or geographic location