Real Estate Marketing & Beyond
In an effort to entice more first time buyers into the market, Freddie Mac says it’s introducing a new three-percent down payment option for those who qualify. The move could well put it into direct competition with the Federal Housing Administration, which offers its own low down payment mortgage.
Freddie Mac said Thursday that the new program is called HomeOne, and does not have any restrictions on income or location.
The FHA’s low down payment mortgage option also allows buyers to obtain a low with just three percent down.
Freddie Mac actually introduced mortgage products called Home Possible with a three-percent down payment in 2015, though it had greater restrictions and was only available to qualified low- and moderate-income buyers. The new HomeOne loans do not replace Home Possible, but will instead complement that program, Freddie Mac said.
The main difference is that HomeOne mortgages will be offered only for conforming fixed-rate mortgages that are secured by a one-unit primary residence. The rules stipulate that in the case of couples, at least one of them should be a first-time buyer. In addition, buyers are required to complete a course in homeownership education before they can qualify. Freddie Mac said HomeOne is available for single-family homes, townhomes and condos. Other properties such as manufactured homes are not allowed.
“Freddie Mac’s HomeOne mortgage is part of the company’s ongoing efforts to support responsible lending, provide sustainable homeownership and improve access to credit,” Danny Gardner, senior vice president of single-family affordable lending and access to credit at Freddie Mac, said in a statement. “HomeOne is a great solution for aspiring homebuyers to grab that first rung of the property ladder and enjoy the financial and social benefits of participating in homeownership.”
Freddie Mac said HomeOne mortgages will be available starting July 29.
