Home Possible^® Mortgage FAQ

No, you need to verify only a borrower's qualifying income. For example, if the borrower can qualify for the mortgage with their base pay and not their overtime income, you may use only the base pay to determine Home Possible eligibility. Take a brief Home Possible^® Income Eligibility tutorial on income requirements for Home Possible mortgages for more information.

No. Only borrower income can be included when determining eligibility for a Home Possible mortgage. You can't include a spouse's income or income from any other member of the household who is not a borrower on the mortgage.

Yes, the occupying borrower may have an ownership interest in one additional financed residential property.

Rental income from a one-unit primary residence can account for up to 30 percent of qualifying income. Any portion of the borrower's rental income from their one-unit primary residence that exceeds 30 percent of the borrower's total income cannot be used to qualify the borrower. For rental income requirements, see Single-Family Seller/Servicer Guide (Guide) Section 4501.6: Borrower income and qualifying ratios for Home Possible mortgages.

No. The Home Possible mortgage is available to all qualified borrowers whose income does not exceed 80% of area median income (AMI).

No. Non-occupying borrowers are permitted on one-unit properties that meet the LTV ratio requirements in the Guide. However at least one borrower must occupy the property as their primary residence.

Borrowers without a credit score can qualify for a Home Possible mortgage, provided the LTV/TLTV/HTLTV ratio for the mortgage does not exceed 95 percent. Sellers can qualify such borrowers in one of the following ways:

• Through Loan Product Advisor^®, if they meet requirements in Guide Section 5201.1: Credit assessment with Loan Product Advisor.
• Through manual underwriting, if they meet the requirements in Guide Section 4501.5: Underwriting requirements for Home Possible Mortgages.

Borrowers may be eligible for a Home Possible mortgage even if one or more of the borrowers on the mortgage does not have a usable credit score. Sellers can qualify such borrowers in one of the following ways:

• Through Loan Product Advisor, if they meet requirements in Guide Section 5201.1: Credit assessment with Loan Product Advisor.
• Through manual underwriting, if they meet the requirements in Guide Section 4501.5: Underwriting requirements for Home Possible Mortgages.

No. A Home Possible mortgage cannot be a cash-out refinance mortgage. The only refinance mortgages that can be Home Possible mortgages are no cash-out refinance mortgages.

You can use the Home Possible Income and Property Eligibility Tool to verify if a borrower can qualify for a Freddie Mac Home Possible^® mortgage based on the property location and the borrowers' qualifying income. Enter a street address in the tool and a pop-up window will appear with the most accurate results available.

Yes. A Seller can deliver a Seller-owned modified mortgage that is a Home Possible mortgage modified for the purpose of a reduction in the interest rate.

If the original mortgage is an LPA Accept Mortgage, the Seller is not required to resubmit the modified mortgage to Loan Product Advisor, nor requalify the borrower. If the original mortgage is not an LPA Accept Mortgage, the Seller is required to manually re-underwrite the mortgage and requalify the borrower in accordance with the requirements in Topics 5100 through 5500.

The age of documentation must be dated no more than 120 days before the modification date for Seller-owned modified mortgages that are Home Possible mortgages. The Seller is required to comply with requirements in Guide Section 5102.4.

The Seller cannot retain the ACE appraisal waiver from the original LPA Accept Mortgage for the modified mortgage. An appraisal would be required in this instance.

Yes. You must obtain a new appraisal with an effective date that is no more than 120 days prior to the modification date before delivering the modified mortgage to Freddie Mac.

Yes. Unless otherwise specified, negotiated provisions may be used with Home Possible mortgages.

A gift or grant from a lender is allowed only after a minimum three percent contribution is made from borrower personal funds or other eligible sources of funds.

In addition to their own funds, a borrower can also receive assistance in reaching the minimum three percent contribution on a one-unit property from other sources. These include: a gift from a person meeting the Guide definition of a related person, funds from a governmental or non-governmental agency, Employer Assisted Homeownership (EAH) programs, and Affordable Seconds^®. Contributing agencies must not be affiliated with the lender or the origination of the mortgage except in the case of an EAH. See Guide Section 4501.7 (c) for more information on sources of funds.

No. Down payment assistance can't be funded through the mortgage transaction in any way, including through points, price, fees or any activity that might be described as premium financing.

Yes. You can use premium financing to assist a borrower with closing costs, financing costs and prepaids/escrows.

You should be able to show that:

At least one borrower must participate in a homeownership education program before the Note Date, or the Effective Date of Permanent Financing for Construction Conversion and Renovation Mortgages, in each of the following instances:

• For purchase transaction Home Possible mortgages when all occupying borrowers are first-time homebuyers.
• For purchase transaction Freddie Mac HomeOne^® mortgages when all borrowers are first-time homebuyers.
• For any transaction when the credit reputation for all borrowers is established using only noncredit payment references.

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 Education and Counseling. Borrowers may also choose to take our free homeownership education course CreditSmart^® Homebuyer U.

Yes. If the program meets our requirements, it would fulfill Home Possible homeownership education requirements. For details on education requirements see Guide Section 5103.6: Homeownership education.

A Seller or Servicer must provide early delinquency counseling to borrowers who have problems meeting their mortgage obligations. The counseling may be provided by a non-profit, third-party homeownership counseling agency, a HUD-approved national counseling agency specified by Freddie Mac or the servicer itself, provided it has the resources to provide counseling comparable to the other options. For details, refer to Guide Section 9101.2: Servicer collection efforts for Mortgages secured by Primary Residences.