Freddie Mac BorrowSmart Program Guidelines

Home buyer signing loan documents for BorrowSmart grant moneyNavigating the landscape of mortgage programs, the Freddie Mac BorrowSmart program stands out as a beacon of financial empowerment. With BorrowSmart guidelines and eligibility criteria at its core, this initiative aims to make homeownership more accessible.

Our comprehensive guide delves into the nuances of the BorrowSmart program, covering essential aspects such as income limits, access, and counseling. Whether you're exploring the BorrowSmart matrix or considering a non-occupant co-borrower option, we provide valuable insights to help you harness the benefits of this innovative Freddie Mac program.

Join us as we unravel the BorrowSmart program, offering clarity on income limits, access points, and the roadmap to realizing your homeownership aspirations.

What is the Freddie Mac BorrowSmart Program?

The Federal Home Loan Corporation (Freddie Mac) offers the BorrowSmart program, which provides credit for potential low-income homebuyers to put toward a 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 homebuyers are eligible.

Occupancy Requirements:

Owner-occupied only. No investors

BorrowSmart Income Limits

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. $1,000 for the borrower(s) whose qualifying income is more significant than 80% and less than or equal to 100% of the county area median income (AMI).
  2. $1,250 for the borrower(s) whose qualifying income is more significant than 50% and less than or equal to 80% of the county AMI.
  3. $2,500 for the borrower(s) whose qualifying income is less than or equal to 50% of the county area median income (AMI).

Check your eligibility.

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 loans 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 those earning 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.


To sum up, the Freddie Mac BorrowSmart initiative provides lenders and borrowers in the mortgage business with helpful guidance. Lenders may assure ethical lending procedures and limit risk by adhering to these criteria, while borrowers can get affordable and sustainable homeownership choices.

Throughout the mortgage process, the program strongly emphasizes the value of careful financial research, open communication, and responsible decision-making. The BorrowSmart rules provide a foundation for developing loan partnerships that benefit lenders and borrowers and promote long-term financial stability.

It is recommended that lenders and borrowers familiarize themselves with these standards to facilitate smooth mortgage transactions and support a robust housing market.

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