For two-to-four unit properties, the borrower is required to contribute at least 3% of the property purchase from their own funds if the loan-to-value (LTV) ratio is greater than 80%.
This enables the borrower to buy the property using no out of pocket funds, which makes buying a home more attainable. In this scenario, instead of using your own funds, you can use an affordable seconds loan, down payment or closing cost assistance grant or a gift to pay the required down payment and closing costs. We review the key Home Possible Program qualification requirements below.įor single unit properties such as a condominium or home, applicants are not required to contribute any personal funds toward the property purchase to qualify for the Home Possible Program.
Home Possible Program Qualification Requirementsīorrowers must meet certain eligibility requirements to qualify for the program. If he or she has solid income and relatively low debt, having a relative as a co-borrower can enhance your loan application and improve your ability to get approved for the loan. In this case, their monthly income and debt expense are included in your mortgage application. For example, one of your parents can be a co-borrower on your mortgage even if they do not live in the property with you. The Home Possible Program also allows you to use a non-occupant co-borrower to qualify for the mortgage on a single family property. If you cannot document that you received regular rental payments from the boarder in the past, you may not be able to use the income that you expect to receive in the future to qualify for the Home Possible program. Please note that to use boarder income to qualify for the mortgage on a single unit property such as a home, condominium or co-op you must verify that the boarder lived with you for at least the past year and that you received rental payments for at least nine months over the past year. Additionally, if you purchase a multi-unit property, the rental income from the units you do not live in could help you qualify for the mortgage. For example if you purchase a single family property and rent out a room, the rental income may help you to qualify for the mortgage. Typically when you apply for a mortgage only the borrower’s personal income is considered to determine your ability to qualify for a mortgage but with the Home Possible Mortgage Program boarder or rental income is also factored into the qualification assessment. The Home Possible program is similar to Fannie Mae’s HomeReady Mortgage Program. The Home Possible program enables home buyers to buy a home with a down payment as low as 3.0% of the property purchase price and no minimum borrower financial contribution. NOTE: this is different than Home Advantage or the other programs offered by the Washington State Housing Finance Commission where ALL proposed borrowers (anyone who will be on the mortgage) must attend a class.Ĭlick here for a current mortgage interest rate quote on property located anywhere in Washington state.ĭon’t forget, we also have the Home Advantage mortgage program, which allows incomes up to $97,000 in the state of Washington and has down payment assistance available as well as Fannie Mae HomePath.How the Home Possible Mortgage Program Worksįreddie Mac offers the Home Possible Mortgage Program to help home buyers with limited resources afford mortgages. There are income limits unless the borrower is buying in an “underserved area census tract” as designated by Freddie Mac.įor purchase transactions when all of the borrowers are first time home buyers, then at least one of the borrowers must attend a home ownership education class. The can include an upfront private mortgage insurance premium if the borrower opts for a “single premium” structure instead of having it paid for monthly in their mortgage payment. Sellers may contribute up to 3% of the sales price towards allowable closing cost, prepaids or reserves. No reserves are required for a single family dwelling. The down payment may be gifted by a family member. What’s so special about this program is that it allows a home buyer to qualify for dramatically reduced mortgage insurance premiums with a minimum down payment. Freddie Mac’s Home Possible Mortgage is a great mortgage program designed for first time home buyers.
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