Freddie Mac BorrowSmart Program Guidelines

Home buyer signing loan documents for BorrowSmart grant moneyWelcome to our article on the Freddie Mac BorrowSmart Program Guidelines. In this article, we will delve into the key features and requirements of the BorrowSmart program offered by Freddie Mac. Whether you are a first-time homebuyer or looking to refinance your existing mortgage, understanding the guidelines of this program can help you make informed decisions about your home financing options. Let's explore the details of the Freddie Mac BorrowSmart Program Guidelines to help you navigate the homebuying process with confidence.

Freddie Mac BorrowSmart Program Overview

The Federal Home Loan Corporation (Freddie Mac) introduces the BorrowSmart program, extending credit to potential low-income homebuyers for down payments. This credit can be used independently or in conjunction with other assistance programs, providing financial flexibility for unexpected expenses and allowing you to allocate more savings for home improvements and furnishings.

Program Features

  • Compatible with Freddie Mac's Home Possible┬« and HomeOneSM mortgage products.
  • Applicable to single-family houses, condominiums, planned unit developments (PUDs), and mobile homes with fixed or adjustable interest rates (not eligible for HomeOne).
  • Available for both first-time and repeat homebuyers, with an owner-occupied occupancy requirement.

BorrowSmart Income Limits

To qualify, borrowers on loans must not have a combined income exceeding 80 percent of the median income in the area. The credit amount varies based on qualifying income.

  • $1,000 for income between 80% and 100% of the county area median income (AMI).
  • $1,250 for income between 50% and 80% of the county AMI.
  • $2,500 for income less than or equal to 50% of the county AMI.

Eligibility Criteria

  • First-time and repeat homebuyers are eligible.
  • Owner-occupied occupancy requirement; no investors.
  • Minimum 3% down payment, fundable entirely from the BorrowSmart program.
  • Credit score requirement: 620 median credit score.
  • Debt-to-income requirement: should not exceed 50%.

Home Possible Loan Program

Freddie Mac's Home Possible Program assists first-time and low-middle-income borrowers. This program guarantees loans for applicants meeting specific requirements and encourages lenders to approve loans for those who might not qualify through conventional mortgage processes.

  • Down payment: 3% of the purchase price.
  • Eligibility criteria: credit score of 660 or higher, debt-to-income rate of 43% or lower, proof of stable employment and income, and a combined income for all borrowers not exceeding 80% of the area's median income.

Conclusion: Freddie Mac BorrowSmart Program Guidelines

In conclusion, the Freddie Mac BorrowSmart Program Guidelines provide a valuable resource for those looking to navigate the complex world of home financing. By understanding the key features and requirements of this program, borrowers can make informed decisions that align with their financial goals.

Whether you are a first-time homebuyer or seeking to refinance, these guidelines offer clarity and guidance throughout the process. With the BorrowSmart program, Freddie Mac aims to empower individuals to make confident choices when it comes to securing a mortgage. Take the time to explore and familiarize yourself with these guidelines to embark on your homebuying journey with confidence and knowledge.

SOURCE:
Home Possible Mortgage
Home Possible Mortgage Underwriting Methods and Requirements
Frequently Asked Questions

Recommended Reading

3% Conventional Loan Down Payment Requirements
Requirements for a Conventional 97 Loan 2024
Home Possible Guidelines - Conventional Loan Requirements
Credit Requirements for a Conventional Loan