Freddie Mac BorrowSmart Program Guidelines

Unlock the potential of homeownership with the Freddie Mac BorrowSmart program, a beacon of financial empowerment in the realm of mortgage programs. By adhering to BorrowSmart guidelines and eligibility criteria, this initiative is designed to make homeownership more accessible, providing you with a roadmap to realize your aspirations.

Delve into our comprehensive guide, where we unravel the nuances of the BorrowSmart program, covering essential aspects like income limits, access points, and counseling. Whether you're navigating the BorrowSmart matrix or considering a non-occupant co-borrower option, our insights offer valuable assistance in harnessing the benefits of this innovative Freddie Mac program.

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.

Summary

In essence, the Freddie Mac BorrowSmart initiative provides a guiding framework for lenders and borrowers in the mortgage business. It promotes ethical lending procedures, mitigates risks, and facilitates affordable and sustainable homeownership choices.

Throughout the mortgage process, the program emphasizes the importance of careful financial research, open communication, and responsible decision-making. The BorrowSmart rules serve as a foundation for developing loan partnerships that benefit both lenders and borrowers, fostering long-term financial stability.

Lenders and borrowers are encouraged to familiarize themselves with these standards to ensure smooth mortgage transactions and contribute to a robust housing market. Explore the BorrowSmart program to make informed decisions, unlocking the door to homeownership with confidence.

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