Home Possible

Home Possible is a Freddie Mac community lending program and it is designed to meet the needs of low and moderate income borrowers by providing financing up to 97% loan-to-value. 3% minimum down payment no minimum contribution is required from the borrower. Down payment can be a gift.

Minimum Credit Score and Maximum Loan-To-Value

Freddie Mac require a minimum credit score of 620.

3% Down payment minimum credit score 620
Loans below 80% loan-to-value do not require mortgage insurance minimum credit score 620
Maximum loan amount $417,000 single family residence
Owner-occupied primary residences only
First time home buyer program

Source of Down payment

Funds for the borrower’s down payment and/or funds for closing costs and/or prepaids may be obtained from the following:

Affordable/Eligible Community Seconds
A gift or unsecured loan from a relative, domestic partner, fiancé or fiancée
A gift, grant or unsecured loan from a church, a public agency, municipality or a non-profit organization (other than a credit union)
Contributions by interested parties, subject to standard interested parties contributions guidelines for conventional mortgages. Seller can contribute.
Employer assistance in the form of a grant, a direct fully repayable second mortgage or unsecured loan or a deferred payment second mortgage or unsecured loan
Cash on hand

Home Buyer Education

Prior to closing a minimum of one borrower must complete an approved home buyer education program if all borrowers are first time home buyers.

Seller Contributions

Interested party contributions, as a percentage of the sales price or appraised value, whichever is less, are limited to the following values

Maximum seller contributions:

90% and higher loan-to-value maximum 3% contributions
75% up to 90% loan-to-value maximum 6% contributions
74.9% and below loan-to-value maximum 9% contributions

Credit - The minimum score for an FHA loan to buy a house is 500.

FHA rates are based on your score:

720 - 850 Excellent *The lowest rates
680 - 719 Good *Very good rates
679 - 580 Fair *Average rates
579 - 500 Poor *Higher rates

On January 20, 2010 FHA announced a new policy to address risk. FHA changed the minimum credit score for new borrowers.

FHA requirements new borrowers will now be required to have a minimum score of 580 to qualify for 3.5% down payment
Borrowers with less than a 580 credit score will be required to put down at least 10%
Minimum 500 credit score
Home Possible