Home Possible® Loans with 3% Down
Buy a home with as little as 3% down!
Lower MI, More Savings
Lower MI, More Savings
Lower MI, More Savings
Lower MI, More Savings
Lower MI, More Savings
Lower MI, More Savings
Eligibility Guidelines
Here’s what you need to know about qualifying for this loan:
Credit Score
Requires a minimum credit score of 660 for eligibility.
Primary Residence
Must be your primary residence. On a 2 to 4 unit home, you can rent out the other units.
Debt Ratio
Borrowers can have a DTI of up to 50%, allowing flexibility in qualification.
Income
Household income must be at or below 80% of your area's median income (AMI). Check your county's limit with our AMI calculator.
Seller Credits
Sellers can contribute up to 3% toward your closing costs and prepaids.
Down Payment
As low as 3% down, making homeownership more accessible.
Mortgage Insurance
Reduced mortgage insurance (MI) compared to standard conventional loans.
Loan Limits
Must adhere to conforming loan limits set by Freddie Mac.
Just 3% down
- Finance up to 97% of the home value
- Negotiate up to 3% in closing cost concessions
- Achieve homeownership faster as a 1st time buyer
Get up to $3,500
- As a pricing credit to lower rates or closing costs
- More financing flexibility with lower upfront costs.
- Great for buyers with limited savings for a down payment.
Smart Rate Options
- Get a waiver of all loan level pricing adjustments (LLPAs)
- Access smart rates with the best bang for your buck
- Get discounted private mortgage insurance
No Junk Fees
- No Processing or Credit Report fees
- No hidden costs. It's all in your Loan Estimate
- Qualify for more home with the same payment
How It Works?
Check Eligibility
Ensure your income meets program limits and the home is your primary residence.
Choose Your Loan
Select between HomeReady® (Fannie Mae) or Home Possible® (Freddie Mac).
Complete Homebuyer Education
First-time buyers may need to take an online homeownership course.
Close in 15 days
Get a low down payment, reduced mortgage insurance, and step into your new home!
Do’s & Don’ts
Do
Take Advantage of Low Down Payments
With as little as 3% down, buyers can secure a mortgage without the burden of saving for a large upfront cost.
Consider Co-Borrower Income
Co-borrower income may disqualify grants if total earnings exceed 80% AMI. Applying individually can help you qualify.
Work with an Approved Lender
Choose a lender experienced with HomeReady® and Home Possible® programs.
Don't
Stretch your budget
Income and DTI limits will restrict your ability to push your budget. This is just the start of the American Dream!
Change jobs during the application
Income above 80% of your area's median income can affect your eligibility for Home Possible.
Delay Your Application
Rates, rules, and guidelines can change, so apply as soon as you're ready!
Affordable Choices
Find the best affordable mortgage option that fits your financial needs and homeownership goals.
Home Possible
FHA
Home-Ready Rate-Break
Grant
$3,500
HomeStart DPA available
Lender Funded Buydown
Rate
Market*
Market*
Market + 2/1 Buydown
Income Limit
80% AMI
No limit
80% AMI
Home Price Limit
-
FHA county loan limit
$350,000
Min Credit Score
660+
580+
620+
Need Help?
Everything you need, in one place!
Recent Articles
Learn everything you need to know as a first-time homebuyer
Frequently asked questions
You’ve got questions, we’ve got answers
Yes, 1 to 4 units, as long as you live in one of them. Second homes and investment properties are not allowed.
The program allows financing for single-family homes, including condominiums and townhomes, making it a great option for first-time buyers or those looking to downsize. Manufactured homes are also eligible, provided they meet specific requirements, such as being permanently affixed to a foundation and complying with HUD guidelines. Additionally, Home Possible supports the purchase of multi-unit properties (2-4 units), allowing borrowers to buy a duplex, triplex, or fourplex, as long as they occupy one of the units.
Yes, private mortgage insurance (PMI) is required if your down payment is less than 20%. However, one of the major benefits of Home Possible over FHA loans is that PMI is removable once you reach 20% equity in your home. This means that after you have built enough equity through payments or home appreciation, you can request to have PMI removed, reducing your monthly mortgage costs. FHA loans, on the other hand, require mortgage insurance for the life of the loan unless you refinance into a conventional loan.
No, Home Possible is available to both first-time and repeat homebuyers, as long as they meet the program’s income and residency requirements. Unlike some first-time homebuyer programs, you don’t need to be purchasing your first-ever home to qualify. However, you must use the property as your primary residence, meaning you cannot use it for rental purposes or as a second home. This makes it a great option for buyers looking to move into a new home while still benefiting from low down payment requirements and flexible lending terms.
