Freddie Mac has announced a new conventional mortgage program called HomeOne that will provide a 3% down payment option for qualified first-time homebuyers. Freddie Mac currently has another 3% down payment conventional mortgage program in place called Home Possible, which offers the 3% down payment option for low- and moderate-income borrowers. However, the new HomeOne program will be different in that there are no geographic or income restrictions on those seeking the 3% down payment option.
The HomeOne program has a variety of requirements that must be met in order for consumers to be deemed eligible for the program, including, but not limited to, the following: mortgages must be conventional and fixed-rate, the permissible loan-to-value ratio is capped at up to 97% (105% total loan-to-value ratio for mortgages with secondary financing if the secondary financing is a Freddie Mac Affordable Second loan) when at least one borrower is a first-time homebuyer, the mortgages may not be used for manufactured homes, and when all borrowers are first-time homebuyers at least one borrower must participate in homeownership education.
Freddie Mac specified in its announcement for the HomeOne program that HomeOne will not be a replacement for its existing Home Possible program, but rather a supplement implemented in order to offer the 3% down payment option to a wider variety of consumers. Freddie Mac also announced that it is capping income limits for the Home Possible program at 100% area median income for properties in designated high-cost areas, designated disaster areas and minority census tracts, in an effort to focus the product on low- and moderate-income borrowers.
Mortgage loans under the updated Home Possible program and the new HomeOne program will be available to consumers beginning July 29, 2018.