Home Possible (3% Down)

What Is Home Possible?

Home Possible is a conventional loan program offered through Freddie Mac that allows eligible borrowers to buy a home with as little as 3% down. It’s specifically designed for low- to moderate-income borrowers, offering more flexibility than other traditional mortgages.

Unlike FHA loans, which require mortgage insurance for the life of the loan, Home Possible loans allow borrowers to cancel their mortgage insurance once they reach 20% equity. This can translate to thousands of dollars saved over time.

Flexibility in Down Payments

One of the biggest perks of Home Possible loans, especially for those with limited savings, is its low down payment requirements and flexible funding sources.

As noted, down payments can be as low as 3% of the purchase price, offering home buyers a chance to enter the housing market sooner without the need for significant savings. But what’s even more appealing is that down payment funds can come from a variety of sources without having to come up with the money on your own:

• Gifts: Monetary gifts from family may be accepted.
• Grants: Grants from nonprofits or government programs can be used as a down payment source.
• Employer assistance: Many companies offer assistance programs that are tied to employment duration.
• Secondary financing: Other financing may be allowed, as long as it meets Freddie Mac’s guidelines.
• Sweat equity: This refers to the value of work you contribute to the home through update, renovations, or repairs.