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Affordable Loan Programs

What are Fannie Mae and Freddie Mac Affordable Home Loans?

Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) that aim to make homeownership accessible and affordable for more people. They accomplish this by purchasing mortgages from lenders and setting guidelines for affordable loan programs. These programs cater to low-to-moderate-income borrowers, first-time homebuyers, repeat buyers looking purchase or refinance your current mortgage, and those who may not qualify for traditional financing due to lower down payments or limited credit history.



Types of Affordable Home Loans 

  1. Fannie Mae’s HomeReady®: Designed for low-to-moderate-income borrowers, especially those in underserved communities. 
  2. HomeReady® First: Designed to add $5000 in assistance along with additional benefits.
  3. Freddie Mac’s Home Possible®: Tailored for first-time and repeat buyers with lower income and down payment flexibility. 
  4. Home Possible® 0%: Allows borrowers to receive 3% loan up to $15,000 from participating lenders 
  5. Freddie Mac’s HomeOne®; Provide flexible options for first-time homebuyers and those looking to refinance 
  6. Freddie Mac’s BorrowerSmart®: Provides eligible borrowers down payment and closing cost

Qualifications for Each Program 

HomeReady® (Fannie Mae) 

  • Income Limits: Borrower income must not exceed 80% of the AMI in most areas. 
  • Credit Score: Minimum 620 (higher scores improve eligibility for better rates). 
  • Property Type: SFR, PUD’s, condo’s, manufactured homes, 2-4 units • First-time Homebuyer: Not required 
  • Homeownership Education: Required for at least one borrower before loan closing 
  • Very Low-Income Purchase incentives (VLIP) $2500 for FTHB 

Conventional 1% Down (Fannie & Freddie) 

  • Income Limits: Income must not exceed 80% of the AMI 
  • Credit Score: Minimum 620 
  • Property Type: SFR, PUD’s, condo’s, manufactured homes 
  • First-time Homebuyer: Required for at least one borrower 
  • Flexibility: Allows for co-borrowers who does not live in the home. 
  • Homeownership Education: Required when all borrowers are first-time homebuyers 
  • Down Payment Assistance Grant: Allows borrowers to receive the greater of 2% of the property value, or up to $7,000 from participating lenders 
  • Interest Rate pricing incentives

Home Possible® (Freddie Mac) 

  • Income Limits: Similar to HomeReady®, income must not exceed 80% of the AMI 
  • Credit Score: Minimum 620 
  • Property Type: SFR, PUD’s, condo’s, manufactured homes, 2-4 units 
  • First-time Homebuyer: Not required 
  • Flexibility: Allows for co-borrowers who do not live in the home. 
  • Homeownership Education: Required for at least one borrower before loan closing. 
  • Interest Rate pricing incentives 
  • Very Low-Income Purchase incentives (VLIP) $2500 for FTHB 

HomeOne® 

  • Income Limits: No specific limits! (primarily designed for first-time buyers) 
  • Credit Score: Minimum 620. 
  • Property Type: SFR, PUD’s, condo’s, manufactured homes 
  • First-time Homebuyer: At least one borrower must ne FTHB 
  • Down Payment: 3%, which can be funded by gifts or grants. 
  • First-time Homebuyer: Not required  
  • Interest Rate pricing incentives 

BorrowerSmart® (Freddie Mac) 

  • Income Limits: Income must not exceed 80% of the AMI 
  • Credit Score: Minimum 620 
  • Property Type: SFR, PUD’s, condo’s, manufactured homes, 2-4 units 
  • First-time Homebuyer: Not required 
  • Homeownership Education: Required through GreenPath before loan closing. 
  • Interest Rate pricing incentives 
  • Very Low-Income Purchase incentives (VLIP) $1250 for FTHB