What is the Home Possible loan program?

Some mortgage loan programs require you to put anywhere from 10 to 20% down on a home, have a preferred credit score, and meet strict income requirements.

These are among the reasons why many first-time home buyers — and even homeowners looking to refinance — don’t think they can qualify for mortgage financing.

Fortunately, there are a few different programs intended to help these borrowers. Whether you need a small down payment, looser credit requirements, or income flexibility, there are options to help.

One such program is called Home Possible, and it’s backed by government-sponsored enterprise Freddie Mac.
 

To qualify for a Home Possible mortgage loan, you have to meet eligibility requirements set by Freddie Mac and your lender. Briefly, you’ll need:
 

•  A 620 or higher credit score
   

• A 3% down payment
   

• Gift funds eligible for down payment requirements
   

• A DTI below 43%, below 45% for manually underwritten files

 

• Stable income and steady employment
   

• Household income no higher than 80% of your area’s median
   

• You’ll live in the home as a primary residence

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