Freddie Mac’s HomeOne Program
There are many mortgage loan programs available to consumers that are geared to serve households and communities that bring in low-to-moderate income. Fannie Mae’s HomeReady and Freddie Mac’s HomePossible are two such programs.
Both of these signature programs lower the minimum down payment requirements compared to other conventional financing solutions, making it especially easy for first time homebuyers to purchase a new home.
However, for those borrowers that don’t fit into the cookie-cutter income tiers, but still need help buying a home, Freddie Mac has introduced its HomeOne mortgage loan program.
HomeOne allows borrowers to purchase a new home or refinance without the low-to-moderate household income restrictions that HomeReady or HomePossible require.
New Century Mortgage consistently recommends HomeOne as a creative solution for borrowers who earn more than the allowable area limits, but are still in need of an affordable mortgage financing solution.
Here is a quick peek into Freddie Mac’s background, as well as some of the ways in which HomeOne might be the best solution for your next purchase or refinance.
HomeOne Mortgage Lending Program
Many first-time homebuyers should be excited to utilize the HomeOne mortgage loan program. Similar to other programs, it offers borrowers a low-down payment option but with the upside in that borrowers do not need to meet certain income eligibility requirements3.
However, at least one borrower is required to be a first-time homebuyer to utilize HomeOne for a purchase3. The home should also be used as a primary dwelling and borrowers.
The program also accommodates grants and affordable seconds, allowing borrowers to still take advantage of community assistance programs3.
While HomeOne does require increased mortgage insurance coverage for loans where borrowers put less money down, it remains competitive to other conventional affordable housing programs. The mortgage insurance can also be cancelled once there is enough equity built in the home3.
Lastly, HomeOne can also be utilized for both purchases as well as no cash out refinances. It can accommodate 1-unit dwellings, including condominiums and planned unit developments3.
Want to learn more about Freddie Mac’s HomeOne Program? New Century Mortgage can answer all your HomeOne mortgage related questions.
Comparing HomePossible VS HomeOne
While both HomePossible and HomeOne are affordable financing options offered by Freddie Mac, there are some key differences to consider before deciding which to go with.
To begin with, the HomePossible loan program has household income restrictions based on the geographic area of the property and borrower. Borrowers also do not have to necessarily be first time home buyers to qualify for a purchase through HomePossible.
Conversely, HomeOne has no income limitations. It is, however, restricted to first time homebuyers.
Both programs allow for purchase and no cash-out refinance transactions. Additionally, borrowers may be required to have mortgage insurance for either program, but both programs allow mortgage insurance to be cancelled after a certain amount of equity has been generated in the property.
First-time homebuyers may also be required to go through new homebuyer education and counseling in either program.
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1 Nolen, J. L. (2020, April 30). Freddie Mac. Retrieved June 9, 2020, from https://www.britannica.com/topic/Freddie-Mac
2 Fannie Mae and Freddie Mac Conservatorship. (n.d.). Retrieved June 8, 2020, from https://www.fhfa.gov/Conservatorship/Pages/History-of-Fannie-Mae–Freddie-Conservatorships.aspx
3 HomeOne. (n.d.). Retrieved June 30, 2020, from https://sf.freddiemac.com/working-with-us/origination-underwriting/mortgage-products/home-one