Shopping for a mortgage can be confusing, especially when faced with options like "HomeOne Vs Home Possible." Did you know that both these Freddie Mac programs offer unique benefits for homebuyers? This article will break down the key differences between HomeOne® and Home Possible®, helping you make an informed decision.
Keep reading to find out which one suits your needs best!
Key Takeaways
✅ HomeOne and Home Possible both offer a low down payment of 3%. This helps first-time homebuyers enter the market.
✅ HomeOne has no income or geographic limits. It’s ideal for buyers without income restrictions.
✅ Home Possible targets low-income families with an income cap at 80% of Area Median Income (AMI).
✅ Both programs require mortgage insurance but allow it to be canceled when reaching 20% equity.
✅ Bennett Capital Partners can help you choose between these options, offering advice and support through the process.
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Overview of HomeOne and Home Possible Programs
HomeOne and Home Possible are two mortgage programs from Freddie Mac. Each offers unique features for homebuyers aiming to secure a low-down-payment loan.
Key Features of HomeOne
HomeOne mortgages offer a low down payment requirement of just 3%. This makes it easier for first-time homebuyers to enter the market. Plus, there are no geographic or income limits, so more people can qualify.
Homebuyer education is required for those buying their first home.
The maximum loan-to-value (LTV) ratio is 97%, which means borrowers can finance almost the entire price of the home. In some cases, they might even go up to 105% TLTV with Affordable Seconds®.
Eligible properties include single-family homes, townhouses, and condos. These flexible terms help various buyers find a suitable mortgage option with Freddie Mac HomeOne.
Key Features of Home Possible
Home Possible is ideal for homebuyers with low to moderate incomes. It allows a minimum down payment of just 3%. This makes owning a house more accessible, especially for first-time buyers.
Eligible properties include single-family homes, condos, co-ops, and manufactured homes. Home Possible allows canceling mortgage insurance when the loan balance drops below 80% of the home's value.
This can lower monthly payments over time.
There are income limits based on location; for instance, in Miami Dade County in 2024, it was $63,550. Buyers must live in the home they purchase. Home Possible provides flexibility and affordability for many types of borrowers looking to buy their first home or upgrade.
"When my husband and I were exploring mortgage options, we were torn between HomeOne and Home Possible. The guidance we received was invaluable, making our home buying experience stress-free and straightforward." — Sarah and David R., Coral Gables, FL
📞 Give Us A Call Today 1-800-457-9057
HomeOne Vs Home Possible Eligibility Requirements
Both HomeOne and Home Possible have different rules for who can apply. Learn what guidelines you need to follow for each program....
HomeOne Mortgage Eligibility
The HomeOne® mortgage program by Freddie Mac is open to all first-time homebuyers. Applicants need a minimum credit score of 620 and must plan to live in the property. This includes homes, townhomes, and condos but only single-unit dwellings.
HomeOne requires a small down payment—just 3%—making it easier for buyers to purchase a home. There are no geographic or income limitations, offering broad access. However, applicants must maintain a debt-to-income ratio under 45%.
Home Possible Mortgage Eligibility
To qualify for the Home Possible mortgage, applicants need a minimum credit score of 620 and must plan to live in the property. Borrowers must meet certain income limits. For instance, in Miami Dade County, Florida, the income limit is $63,550 as of 2024. Both first-time and repeat homebuyers can apply if they earn less than this amount.
The program allows buyers to purchase homes with one to four units. They can also use a non-occupying co-borrower to help with the down payment. This means that someone who will not live in the house can still contribute financially.
Freddie Mac’s Home Possible offers options without geographic restrictions. The minimum down payment required is 3%. This makes it easier for more people to get into a home even if they do not have much saved up.
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Home Possible Mortgage Income Limits & Guidelines
Qualifying income for the Home Possible mortgage must be 80% or less of the Area Median Income (AMI). Borrowers can verify eligibility using the Home Possible® Income and Eligibility Tool. This ensures they meet all required income guidelines.
Down payments for Home Possible mortgages can come from various sources. These include family help, employer assistance, or personal savings. Mortgage insurance is needed but can be canceled once borrowers reach 20% equity.
All applicants must complete financial literacy education through CreditSmart® Homebuyer U tutorial to qualify.
"As a first-time homebuyer, I was overwhelmed by the mortgage options available to me. Bennett Capital Partners walked me through the differences between HomeOne and Home Possible, helping me choose the best program for my financial situation. I couldn't be happier with the support I received." — Emily S., Miami, FL
📞 Give Us A Call Today 1-800-457-9057
Differences in Mortgage Terms and Benefits
HomeOne has no income limits, making it accessible for many buyers. Home Possible, on the other hand, offers greater down payment flexibility and benefits low-income families....
Down Payment Requirements
Understanding the down payment requirements for HomeOne® and Home Possible® programs can help homebuyers, real estate investors, and realtors make informed decisions. Below is a detailed comparison of the down payment requirements for these Freddie Mac mortgage options.
Feature | HomeOne® | Home Possible® |
Minimum Down Payment | 3% | 3% |
Loan-to-Value (LTV) Ratio | Maximum 97% | Maximum 97% |
Total Loan-to-Value (TLTV) Ratio | Up to 105% with certain financing | Not specified in the same way as HomeOne® |
FHA Loan Comparison | Requires 1.75% upfront mortgage insurance, 0.85% annual insurance | Requires 1.75% upfront mortgage insurance, 0.85% annual insurance |
Both programs require only a 3% down payment, making them accessible to many homebuyers. Whether you're a first-time buyer or investing in real estate, understanding these options is key to making the best financial choice.
Income Limits and Flexibility
Income limits and flexibility play crucial roles in determining the right mortgage program for homebuyers, real estate investors, and realtors. Understanding these distinctions between HomeOne® and Home Possible® can help in making informed decisions.
Program | Income Limits | Flexibility |
HomeOne® | No geographic or income limits | Great for buyers without income restrictions |
Home Possible® | Capped at 80% of AMI (Area Median Income) | Allows flexible down payment sources (e.g., family contributions, employer assistance) |
HomeOne® offers no income limits, making it ideal for a broad applicant pool. It is suited for those who do not fall into low-income categories.
Home Possible®, on the other hand, targets low-income borrowers. This program has an income cap at 80% of the Area Median Income (AMI). It also provides flexibility with down payment sources. Family contributions or employer assistance are acceptable. This can make it easier for buyers meeting the income criteria to secure a loan.
For realtors and investors, choosing the right program means understanding these income-related nuances. This ensures clients are matched with the best possible mortgage solution.
Understanding Minimum Down Payment for a House
The minimum down payment depends on the type of mortgage. HomeOne® offers first-time homebuyers a 3% down payment option, making it easier to enter the market. 1 In contrast, FHA loans require a higher 3.5% down payment but allow more flexibility in sources.
Private Mortgage Insurance (PMI) is another factor to consider. With Freddie Mac's loans, PMI can be canceled once you reduce your mortgage balance to 78% of the home's value—this saves money over time. It’s essential for buyers and realtors to know these differences when choosing between HomeOne® and other options like an FHA loan or USDA home loan.
Bennett Capital Partners Mortgage First Time Homebuyer Specialists
Bennett Capital Partners helps first-time homebuyers with expert advice and support... Read more about how they can assist you!
Bennett Capital Partners Mortgage Offerings
Bennett Capital Partners offers excellent mortgage options. Their focus is on helping first-time homebuyers and other clients find the best solutions.
How Bennett Capital Partners Supports Home Buyers
Homebuyers, real estate investors, and realtors can rely on Bennett Capital Partners Mortgage for expert guidance. Their experience and connections make home buying easier.
By leveraging these services, clients can have a smoother home-buying experience with confidence and ease.
Contact Us
Need help with financing? Reach out to Bennett Capital Partners Mortgage. They’re located at 1101 Brickell Ave STE 800, Miami, FL 33131. You can call them at 1-800-457-9057 or email info@bcpmortgage.com.
Follow them on social media for updates and tips! Find them on Facebook, Twitter, and Instagram. Whether you're a homebuyer or an investor in commercial real estate, their team is ready to assist you with your mortgage needs.
"I was unsure which Freddie Mac mortgage to choose until I read the article on HomeOne vs. Home Possible. Bennett Capital Partners Mortgage made it easy to understand the pros and cons of each option. Their personalized advice led me to select Home Possible, which fit my needs perfectly as a low-income buyer. I am now a proud homeowner, thanks to their expertise!" — James P., South Miami, FL
📞 Give Us A Call Today 1-800-457-9057
Conclusion
Choosing between HomeOne and Home Possible depends on your needs as a homebuyer. Both programs offer unique benefits and cater to different financial situations. Whether you’re looking for flexible financing or low down payment options, either program can help you achieve homeownership.
Bennett Capital Partners can guide you through the process, ensuring that you find the mortgage solution that fits your goals.
FAQs
What are the key differences between Freddie Mac's HomeOne and Home Possible mortgage programs?
Freddie Mac’s HomeOne® doesn’t have income or geographic restrictions, making it accessible for many. In contrast, Freddie Mac's Home Possible program has specific income limits but offers more options like lower down payments.
Who is eligible for the Freddie Mac HomeOne mortgage program?
The Freddie Mac HomeOne mortgage program is available to first-time homebuyers who haven't owned a home in the past three years. There are no income limits, but you’ll need to meet certain credit score requirements.
Do both programs require mortgage insurance?
Yes, both the HomeOne loan and the Freddie Mac Home Possible loan require borrowers to pay mortgage insurance if their down payment is less than 20%. This ensures that lenders are protected against default.
Can I refinance my existing home with either of these programs?
You can refinance your current home with both the Freddie Mac’s affordable options—HomeOne and Home Possible—provided you meet their respective guidelines and eligibility requirements.
Are there any benefits of choosing one over the other for low-income buyers?
For low-income buyers, Freddie Mac’s Home Possible offers more favorable terms such as reduced interest rates and flexible underwriting guidelines compared to conventional loans without income restrictions like those under the Federal Housing Administration (FHA) insured loan.
How do I know which program suits me best when buying a home?
To determine whether you should opt for Homeready® or Freddie mac's affordable choices such as Fannie Mae Homeready®, consider factors like your monthly mortgage payment capacity, equity in-home prospects from potential refinancing opportunities along with owner-occupancy plans—all tailored by consulting with knowledgeable creditors familiar within this arena!
Philip Bennett
Philip is the owner and principal mortgage broker at Bennett Capital Partners, Business NMLS# 2046828. He earned his degree in Accounting and Finance from Binghamton University and holds a Master's Degree in Finance from NOVA Southeastern University. With over 20 years of experience in the mortgage industry, Philip has been a leader in his field and has personally originated over $2 billion in residential and commercial mortgages.
Learn more about Philip Bennett's background and experience on our Founder's page. Whether you're a first-time homebuyer or a seasoned real estate investor, our team is here to help you achieve your real estate goals. Don't wait any longer; contact us today and let us help you find the right mortgage for your needs.
Sources
Home Possible Mortgage | Investopedia
