Freddie Mac Home Possible Advantage
The Home Possible Advantage Program is a loan program designed to help those who have lower income to qualify for a mortgage to purchase a home. Individuals who may not qualify for a traditional loan may need the Home Possible Advantage Program requirements. This program, created by Freddie Mac, is aimed at areas that are underserved by mortgage lenders as well as instances in which the home value in the area is too high and therefore restrictive for home buyers in the area.
What Are Home Possible Advantage Program Benefits?
For those who obtain the Home Possible Advantage loan, several benefits are available. First, this type of home loan is available for those who have lower income. It also has a lower down payment requirement, with fewer restrictions on where that down payment may come from. Though there are still limitations to this type of program, most will find that the Home Possible Advantage loan can offer options to individuals who otherwise could not qualify. Additional benefits include:
- You can use them as a self-employed individual.
- They are available widely from various lenders.
- Down payments are as low as three percent.
- Borrowers can use assistance programs to obtain the down payment requirement.
- It can be used by those who have owned a home previously.
Home Possible Advantage Loan Guidelines
To qualify, home buyers need to meet very specific Home Possible Loan guidelines. Those include:
- This type of loan is available to those who are buying a single family home. Multiple units may not qualify under the Home Possible Advantage Guidelines.
- The maximum loan to value ratio is 97 percent. That means that borrowers can borrow as much as 97 percent of the home’s value.
- If secondary financing is available, such as Affordable Second mortgage, it is possible to obtain more to a loan to value ratio of 105 percent. This does not apply to a home equity line of credit.
- The person obtaining the Home Possible mortgage loan must live in the home as his or her primary residence.
- No manufactured homes apply here. Additionally, Home Possible Advantage guidelines do not allow for investment properties or second homes to qualify.
Additional Home Possible Advantage guidelines indicate that the home borrowers debt to income ratio cannot be higher than 43 percent. This is a bit more restrictive than some programs. Additionally, as much as 100 percent of the party’s down payment can come from donations from family members, an assistance program, or an employer.
Home Possible Advantage Loan
Home Possible loan guidelines state that these loans can be fixed rate mortgages only. That is, they cannot be any type of adjustable rate loan. Additionally, the Home Possible mortgage loan can be for no longer than 30 years.
How to Obtain a Freddie Mac Home Possible Advantage Loan
The Freddie Mac Home Possible Advantage loan is available through many lenders. Generally, this loan option is available to many people. While it can be an ideal choice for those, who are young or first time home buyers, that is not a requirement. Rather, the borrower can be an existing loan holder who is purchasing a new home. Additionally, it can be used by those who may not qualify for other loans.
Individuals who may not meet other restrictions should consider the benefits of the Freddie Mac Home Possible Advantage. Individuals who can prove their income and who have the down payment requirement (generally just three percent) can apply for their loan online. This loan program, like many other, depends on lender qualifications. Lenders must still approve of the borrower’s ability to pay for the loan before they will provide it.
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