Freddie Mac BorrowSmart℠: Free grant money
Are
you in the market for a mortgage and need assistance? If so, the
BorrowSmart Mortgage Grant Program is here to help! This innovative
grant program offers eligible home buyers access to exclusive
mortgage grants that can be used towards down payments and other
related home purchasing costs. With this innovative grant program,
applicants have access to more funds than ever before, which can
make buying a home much more accessible.
What is the Freddie Mac BorrowSmartSM Program?
BorrowSmart is a program offered by the Federal Home Loan Corporation (Freddie Mac) that provides prospective purchasers of homes with modest incomes with a credit that may be used toward the down payment.
This credit can be used independently or in conjunction with other assistance programs. Thanks to this credit, you won't have to go into your savings for unexpected expenses, so you'll have more money set aside for home improvements and new furnishings when you buy a property with it.
This program is designed to function with Freddie Mac's Home Possible® and HomeOneSM mortgage products. Acquiring single-family houses, condominiums, planned unit developments (PUDs), and mobile homes is compatible with loans with either a fixed or an adjustable interest rate (not eligible for HomeOne).
First-Time Home Buyer Requirement
First-time and repeat home buyers are eligible.
Occupancy Requirements
Owner occupied only. No investors
Income Limits for the BorrowSmart Grant Program
Borrowers on loans must not have a combined income that exceeds 80 percent of the median income in the area. This differs from other loan alternatives that consider the family's entire income, and only the payment used to qualify on the application will be considered.
- $1,000 for the borrower(s) whose qualifying income is greater than 80% and less than or equal to 100% of the county area median income (AMI)
- $1,250 for the borrower(s) whose qualifying income is greater than 50% and less than or equal to 80% of the county AMI
- $2,500 for the borrower(s) whose qualifying income is less than or equal to 50% of the county area median income (AMI)
Home Buyer Education Course
Borrowers must complete a homeownership counseling course. The out-of-pocket cost is approximately $99.
Down Payment
The minimum 3% down payment may be funded entirely from the BorrowSmart program.
Credit Score Requirement
620 median credit score
Debt to Income Requirement
Depending on your qualifications, the maximum debt-to-income ratio (DTI) can differ, but it should never exceed 50%.
Home Possible Loan Program
Freddie Mac offers the Possible Home Program, a mortgage program that helps first-time and low-middle-income borrowers qualify. The program guarantees the loan for borrowers who meet specific requirements and encourages lenders to approve loans for applicants who wouldn’t typically qualify through a conventional mortgage process.
The down payment required for all Possible Home Mortgages is 3% of the purchase price, and down payment funds can be satisfied through a family gift, Employer Assisted Homeownership (EAH) programs or a secondary financing option that qualifies for Freddie Mac’s Affordable Seconds program.
Home Possible Loans are for first-time homebuyers, defined as anyone who has not owned residential property within the previous three years, and low-income borrowers, defined as 80% of the geographical area’s median income.
Freddie Mac outlines several eligibility criteria for borrowers, including a credit score of 660 or higher, a debt-to-income rate of 43% or lower, a down payment of 3%, proof of stable employment and income, and a combined income for all borrowers of no more than 80% of the area’s median income. Additionally, Freddie Mac also encourages responsible homeownership through education requirements.
Summary
The Freddie Mac BorrowSmartSM Grant Program offers qualified home buyers up to $2,500 in assistance for their down payment.
The program is designed to work in tandem with Freddie Mac's Home Possible® and HomeOneSM mortgage products, and it is compatible with loans for the acquisition of single-family houses, condominiums, planned unit developments (PUDs), and mobile homes with either a fixed or an adjustable interest rate (not eligible for HomeOne).
Eligible participants include first-time and repeat home buyers, who are required to occupy the property as their primary residence and must not exceed 80% of the median income in the area.
To qualify, borrowers must complete a homeownership counseling course, have a minimum credit score of 620, and have a debt-to-income ratio (DTI) of no more than 50%. The minimum 3% down payment may be funded entirely from the BorrowSmart program.
SOURCE:
Home Possible Mortgage
Home Possible Mortgage Underwriting Methods and Requirements
Frequently Asked Questions
Recommended Reading
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