Freddie Mac Home Possible
A Home Possible mortgage is an opportunity for lower-income individuals and those who may not have a history of purchasing real estate to own a home. A Home Possible mortgage reduces some of the requirements on home loans, making it possible for borrowers to obtain a loan at a lower cost. This type of loan was created by Freddie Mac, a subsidiary organization of the U.S. federal government. A Home Possible mortgage is not issued directly from this organization but through approved Home Possible mortgage lenders.
What Are the Advantages of a Home Possible Mortgage?
A Home Possible loan has numerous benefits. The down payment requirement drops to between three and five percent with these loans. Additionally, they are available for those who are low- to moderate-income borrowers. This includes first time home buyers and those who are younger. Generally, these loans are available in areas where the typical cost of a home is significantly higher or in areas where there are not as many lending opportunities available.
Home Possible Loan guidelines include the following:
- The maximum loan to value of the home is no more than 95 percent. That is, home buyers can obtain a Home Possible loan for as much as 95 percent of the value of the property.
- The Home Possible program is available for homes with one to four units, including single family homes, condos, and some manufactured homes.
- Through the Home Possible program, individuals can obtain help for their down payment. This can include down payment contributions from families or employers.
- The Home Possible program does require mortgage insurance. However, it can be canceled over time when the balance of the loan falls below 80 percent of the property’s value.
- These loans are available for 15 or 30-year term lengths. Home loan finance options include fixed rate mortgage as well as some adjustable rate mortgages.
Who Qualifies for the Home Possible Loan Program?
One of the key benefits of the Home Possible loan program is that it is easier to qualify for than most other loans. There are several reasons for this easier home loan finance option. First, borrowers who may have lower income may still qualify, if they are able to make payments on the loan as well as on the taxes and insurance for it. Additionally, the Home Possible Loan program also does not relate directly to credit. Borrowers who do not have a credit score or do not have a good credit score may still qualify for it. This depends on the qualifications set by Home Possible mortgage lenders.
California Home Loan Mortgage Needs
Keep in mind that this is an option for a California home loan mortgage. In much of the area, home values are very high, making it difficult for the average buyer to afford to purchase a home. However, this home loan finance option can open the door to this. For those who are looking for California home loans online, applying for this program may be an important step. It is not the only California home loan mortgage option available, though.
Working with Home Possible mortgage lenders is the first step for those who wish to obtain these loans. This includes obtaining California home loans online or applying for loans from other states with high home values or limited access to loans.
Home Possible mortgage lenders set the specific criteria they will accept for borrowers. In some situations, they may not offer access to this type of loan. However, for high-income states like California, home loans online through the Home Possible program can be an exceptional opportunity to find affordable loans without a lot of required down payment.
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