The ideal borrower would have a high credit score, an income that more than justifies the loan, a long, stable employment history, and enough reserves to cover several months of mortgage payments. Obviously, that doesn’t describe everyone. The only option used to be an FHA loan, but that has changed.
An excellent alternative to FHA loans, the Freddie Mac Home Possible and Home Possible Advantage Mortgage are responsible low down payment options for first time home buyers, as well as, low and moderate income borrowers looking to purchase in high-cost or under-served communities.
Home possible loans provide an opportunity for borrowers with limited savings to purchase a home. Borrowers with good credit and the ability to pay closing costs can purchase a home without having to save for years to put together the 20 percent down payment.
Home Possible loans only require a 3% down payment, and the borrowers can use gifts from parents, grants, savings and other sources.
Credit score requirements vary, but can range from 620-680 for a single family owner occupied property.
Like an FHA loan you will be required to pay for private mortgage insurance, but the rates are extremely affordable for the Home Possible programs, and you can have the PMI cancelled once you have built 20% equity in your home.
These programs also requires that first time buyers fulfill a home ownership education requirement which can be satisfied by taking a free online tutorial.
Home Possible and Home Possible Advantage are secure programs that open the door to home ownership for responsible, deserving buyers while still maintaining strict underwriting guidelines. Mortgage Equity Partners has partnered with FreddieMac to offer these exciting new programs.