- Rate and Term Refinance
- Cash Out Refinance
- FHA Streamline Refinances
- VA IRRL Refinances
- Reverse Mortgage Refinance
What is a Home Possible Mortgage?
You’ve been imagining your dream house for a long time now. But you can’t imagine getting approved for a home loan with your income and credit background. Besides, you can’t imagine coming up with a big chunk of cash for a 20% down payment. So you just keep dreaming.
However, Secure Choice Lending is happy to talk to you about a home loan option designed to help very low-income to moderate-income borrowers secure the home of their dreams. So keep imagining that wonderful day that you move-in to your dream house because a Home Possible Mortgage can help make that dream become a reality, without breaking the bank.
So What is Home Possible Mortgage?
A Home Possible Mortgage is a conventional loan program created by Freddie Mac. It is a low down payment mortgage option for first-time homebuyers and low- to moderate-income borrowers.
“Backed by Freddie Mac, Home Possible loans offer first-time homebuyers reduced down payments, reduced private mortgage insurance requirements, and flexible credit terms.”
As an added perk, the mortgage insurance on Home Possible loans can be cancelled once you reach a 78-80% loan-to-value, or LTV, ratio.
Eligible properties include a one-to-four unit primary residence or a manufactured home that meets specific guidelines. As such, this program allows homebuyers to use non-traditional sources of income to qualify. For instance, you can use income from renters.
As with HomeReady loans, a Home Possible mortgage will require you to complete an approved homeownership education course. This can be taken online or in-person.
Related article: What is a HomeReady Mortgage?
Updated Home Possible Offering What used to be two separate offerings have now been consolidated into one. Freddie Mac added credit flexibilities and simplified Home Possible mortgage requirements by consolidating Home Possible and Home Possible Advantage into a single offering.
This article will only talk about the consolidated Home Possible mortgage program.
Who is the Home Possible
Program for?
Take a look at some of the benefits of Home Possible Loans:
- You are a first-time homebuyer, a move-up borrower, or a retiree.
- You are a very low, or moderate income borrower.
- Your family is in low-income census tracts.
What are the Benefits of Home Possible Mortgages?
- Minimum down payment of 3 percent is allowed. You can realize your dream of owning a home without the need of gathering a 20% down payment.
- Flexible sources of funds for down payment.
- Stable monthly payments with fixed-rate mortgages.
- Credit fees are capped and less than standard fees for all loans over 80 percent LTV.
- Reduced mortgage insurance coverage levels for LTV ratios greater than 90 percent.
- You can cancel mortgage insurance upon reaching 20% equity, making the monthly mortgage payment lower and potentially saving thousands of dollars over the life of the loan.
- Apply sweat equity for the entire amount of the down payment and closing costs. If you are a do-it-yourselfer, you can apply sweat equity to assist in meeting the down payment and closing costs.
Home Possible Income Limits
The income limits are stated in the Home Possible guidelines. The best way to determine your local income limits and property eligibility is to call Secure Choice Lending at 951-733-8925. Our loan officers will help you with Freddie Mac’s income and property eligibility tool.
- Your income, as the borrower, must not exceed 100% of the area median income (AMI) where the house you are buying is located, except if the property is located within a low-income census tract.
- There will continue to be no income limit for properties located in low-income census tracts, where the median income is at or below 80 percent AMI.
Because of the income limits, you must be able to provide income documentation. All income from all validated sources must be included ev en commissions made and even if it’s not necessary for qualification.
The Home Possible guidelines also require proof stable monthly income from you and all other borrowers signing the mortgage.
Home Possible Homebuyer Education Course
Before the loan closing, you are required to complete a homeownership course. Freddie Mac has invested in the CreditSmart courses to teach financial literacy and to help families achieve successful and sustainable homeownership.
CreditSmart is an online and interactive educational platform that provides consumers a flexible way to learn how to achieve their financial and homeownership goals. It is a guide to better credit, money management, and responsible homeownership.
It’s key benefits to you are the
following:
- CreditSmart is multi-lingual. Aside from English, it is also available in Spanish, Chinese, Korean, and Vietnamese.
- It teaches how to improve credit, develop life-long money management skills, and achieve successful and sustainable homeownership.
- It is free, self-paced, and available online.
- No out-of-pocket costs
- No waiting period
The CreditSmart Steps to Homeownership courses satisfies the homeownership education requirement for borrower’s applying for a Home Possible mortgage.
You can print out a certificate after you complete the course. This certificate gets filed in your loan records..
Frequently Asked Questions (And Freddie Mac’s Official Answers)
“No. The Home Possible mortgage is available to all qualified borrowers whose income does not exceed 100% of area median income (AMI), except in low-income census tracts, where there is no income limit.”
Call Secure Choice Lending at 951-733-8925 to find out the AMI where you’re looking to purchase a home
You are allowed assistance from relatives (must meet the Guide definition of a related person), funds from a government or non-government agency (must not be affiliated with the lender), or from Employer Assisted Homeownership or EAH programs.
Call Secure Choice Lending at 951-733-8925 to learn more about your different sources of funds for your down payment.
“No. Homeownership education is required only for a purchase mortgage when all borrowers are first-time homebuyers, or if the credit reputation for all borrowers is established using only Noncredit Payment References. In both instances, at least one borrower must complete a homeownership education program for a purchase mortgage before the mortgage’s note date.”
Secure Choice Lending will be happy to explain the homeownership education program. Call us at 951-733-8925 to get all of your questions answered.
“No. Homeownership education is not required for Home Possible mortgages that are refinances.”
“You can meet this requirement with homebuyer education provided by HUD-approved counseling agencies, housing finance agencies (HFAs), community development financial institutions (CDFIs), mortgage insurance companies or other programs that meet National Industry Standards for Homeownership and Counseling. Borrowers may also choose to take our free homebuyer training CreditSmart® – Steps to Homeownership.”
Call Secure Choice Lending at 951-733-8925 to learn more and find the nearest approved location for your homeownership education.
Secure Choice Lending Can Assist You With a Home Possible Loan
Home Possible mortgages keep money in your pocket. Secure Choice Lending wants to do that too. Call us to find out how.
Call Secure Choice Lending at 951-733-8925 today for your Home Possible mortgage.
“Home Possible mortgages keep money in your pocket. Secure Choice Lending wants to do that too.”
Our Loan Officers will be happy to answer all your questions and discuss your options until everything is clear to you.
Secure Choice Lending is a full service mortgage broker that will secure you a mortgage that doesn’t break the bank.
To streamline the lending experience, our team of financial experts matches consumer needs with the appropriate loan programs and level of risk. With loan officers versed in all mortgage types, solutions to your home-buying questions are a phone call away.
951-733-8925