Fannie Mae and Freddie Mac offer $2500 credit for lower income families
Fannie Mae and Freddie Mac have announced a $2,500 credit for low-income borrowers to make homeownership more accessible. Fannie Mae and Freddie Mac recognize that down payment and closing costs remain a significant barrier to homeownership for many borrowers. Fannie Mae and Freddie Mac are large companies that guarantee most mortgages originated in the US. Together, they are referred to as government-sponsored enterprises (GSEs).
Fannie Mae
Fannie Mae announced their new $2,500 credit program for down payment assistance on January 24, 2024. The temporary credit will be accessible through their HomeReady mortgage program. HomeReady has a low-down payment option and expanded financing flexibility. HomeReady was designed to help creditworthy low-income borrowers, whether they’re first-time or repeat borrowers, purchase a home.
Key Features:
- Borrowers in South Carolina with a qualifying income of less than or equal to 50% of the applicable area median income (AMI) of the subject property’s location are eligible.
- The entire $2500 credit must be provided directly to the borrower through the transaction to be used for down payment and closing costs, including escrows and mortgage insurance premiums.
- Available through Fannie Mae’s HomePossible Program.
Freddie Mac
Freddie Mac will make this credit accessible through their Home Possible Mortgage and HFA Advantage Mortgage Product. Home Possible provides credit flexibility to help very low to low-income borrowers enter the housing market with a minimum down payment of just 3% of the home’s sales price. The $2500 credit will also be accessible through their HFA Advantage Mortgage product, which is offered to housing finance agencies seeking responsible ways to expand homeownership.
Key Features:
- Borrowers earning 50% of the area median income or less who are purchasing a home, provided specific requirements are met, are eligible.
- Funds can be used for down payment, closing costs, escrow, and mortgage insurance.
- Available through Freddie Mac’s Home Possible and HFA Advantage Mortgage Products.
This initiative is part of Fannie Mae and Freddie Mac’s ongoing commitment to making homeownership more attainable for low-income families and this applies to South Carolina residents. To learn more about your eligibility for this $2500 credit, contact our loan team for more information.
