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HomeOne® Mortgage FAQ

General

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  1. Do all HomeOne® borrowers need to take a homeownership education course?
    No, homeownership education is only required when all borrowers are first-time homebuyers. If all borrowers are first-time homebuyers, at least one borrower must complete a homeownership education program before the mortgage's note date. The free Freddie Mac financial education curriculum, CreditSmart® , is an acceptable form of homeownership education in addition to other alternatives specified in the Single-Family Seller/Servicer Guide (Guide) Bulletin.
  2. Can HomeOne be manually underwritten?
    No, a HomeOne mortgage cannot be manually underwritten, and requires a Loan Product Advisor® Risk Class of Accept.
  3. Are borrowers without credit scores allowed for HomeOne?
    At least one borrower on the transaction must have a usable credit score as determined by Loan Product Advisor®.
  4. Is HomeOne only eligible for fixed-rate conforming mortgages?

    HomeOne mortgages must be fixed-rate conforming mortgages secured by 1- unit properties where all borrowers occupy the property as their primary residence. The following loan characteristics are not eligible:

    • Adjustable rate mortgages
    • Super conforming loans
    • Cash-out refinance loans
    • Second homes and investment properties
  5. Are there any new attributes I need to provide in order to identify a HomeOne mortgage in Freddie Mac systems?
    Our systems will leverage the same data clients submit normally in order to identify a HomeOne mortgage. This eliminates the need for an offering identifier in Loan Product Advisor or an Investor Feature Identifier (IFI) or Loan Program Identifier in Loan Selling Advisor®. For example, Loan Product Advisor will make the determination based on the absence of an offering identifier, as well as LTV/TLTV/HTLTV exceeding 95 percent.
  6. What is the pricing for HomeOne?

    For pricing related to HomeOne mortgages, refer to Exhibit 19, Credit Fees and Exhibit 19A, Credit Fee Cap Eligibility Criteria, as applicable.

  7. What does the effective date for HomeOne represent?
    The effective date represents the date that HomeOne is available in Loan Product Advisor.
  8. Is the mortgage insurance for HomeOne cancellable with sufficient equity?
    Yes, unlike government-insured loans, the mortgage insurance for HomeOne may be cancelled once the property’s equity reaches 20 percent.
  9. Does HomeOne require a minimum LTV/TLTV and/or HTLTV?
    While there is no minimum required LTV/TLTV/HTLTV for a HomeOne purchase or no cash out refinance, a loan that has an LTV/TLTV/HTLTV 95% or lower would fall under our standard Guide policy. Loans that have an LTV/TLTV/HTLTV greater than 95% will be recognized as a HomeOne mortgage in Loan Product Advisor, if there is no Offering Identifier provided. An example would be a loan with an LTV of 90% and subordinate financing that results in a TLTV/HTLTV of 96% would be assessed as a HomeOne. A loan with an LTV of 90% and subordinate financing that results in a TLTV/HTLTV of 94% will be considered a standard conventional product and subject to our standard Guide policy.

Borrower Eligibility

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  1. Do all borrowers have to be first-time homebuyers for a HomeOne mortgage?

    No, for purchase transactions, at least one borrower must be a first-time homebuyer. Our Guide defines a first-time homebuyer as an individual who meets all the following requirements:

    • Is purchasing the mortgaged premises
    • Will reside in the mortgaged premises as a primary residence
    • Had no ownership interest (sole or joint) in a residential property during the three-year period preceding the date of the purchase of the mortgaged premises

    In addition, a displaced homemaker or a single parent may also be considered a first-time homebuyer if the individual had no ownership interest in a residential property during the preceding three-year period other than an ownership interest in the marital residence with a spouse. If a displaced homemaker or a single parent solely owned the marital residence, or solely or jointly owned a second home or investment property, the individual may not be considered a first-time homebuyer.

  2. I have multiple borrowers on a loan-- one of the borrowers meets the definition of a first-time homebuyer, but the other borrower currently owns another property. Is this allowed?
    Yes, this is acceptable. HomeOne requires only one of the borrowers to meet the definition of a first-time homebuyer.
  3. If a borrower inherited a residential property and the borrower now wants to purchase a home using HomeOne, does having an inherited property disqualify the borrower from meeting the first-time homebuyer requirement?
    At least one borrower on the HomeOne mortgage must be a first-time homebuyer, which is defined as having no ownership interest (either sole or joint) in a residential property in the three-year period prior to the purchase of the subject property.  If the borrower currently owns the inherited property – or has owned it within the past three years, then the borrower would be ineligible for a HomeOne mortgage unless a co-borrower is present who meets the ownership interest requirements.

Refinancing

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  1. Can a borrower refinance a mortgage using HomeOne?
    A HomeOne mortgage may be originated as a “no cash-out” refinance. If the LTV or the Home Equity Combined LTV (HTLTV) ratio is greater than 95 percent, the mortgage being refinanced must be owned or securitized by Freddie Mac unless it has secondary financing that is an Affordable Second. If the LTV and HTLTV is less than or equal to 95 percent, the TLTV ratio exceeds 95 percent and the secondary financing is an Affordable Second, the loan being refinanced does not have to be owned by Freddie Mac. The maximum TLTV ratio of a HomeOne is 105 percent if the secondary financing is an Affordable Second®.
  2. For a HomeOne no cash-out refinance, how will I know if the mortgage being refinanced is owned by Freddie Mac?
    The borrower can either look up the loan using the Freddie Mac Loan Look-up Tool or can authorize you to obtain this information on their behalf.
  3. The delivery requirements state that if available, I should also provide the associated Freddie Mac loan number of the mortgage being refinanced. Will the Freddie Mac Loan Look-Up Tool provide me with that information?
    No, the tool was designed to assist you and your borrowers to quickly find out if Freddie Mac owns the loan. If you have access to the existing Freddie Mac loan number, we simply ask that it be delivered, however, it’s not a critical edit in Loan Selling Advisor®, as we understand that you may not have access to the existing loan number.
  4. For a no cash-out refinance, if there is an Affordable Second®, does the second have to be paid-off, or can it be resubordinated?
    For a no cash-out refinance, the Affordable Second® can be paid-off or resubordinated.

Property Requirements

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  1. Which properties are eligible for HomeOne?
    1-unit properties, including condominiums and units in Planned Unit Developments are eligible for HomeOne. HomeOne does not permit Manufactured Homes, but does allow CHOICEHome®.
  2. Does HomeOne require reserves for 1-unit properties?
    Reserves are determined by Loan Product Advisor.
  3. Does HomeOne allow the use of Mortgage Credit Certificates?
    Yes, HomeOne allows the use of Mortgage Credit Certificates. It may be considered as qualifying income, provided the requirements in Guide Section 5305.2 are met.
  4. What rental income may be used to qualify the loan for a HomeOne mortgage?
    Two forms of rental income are eligible with HomeOne mortgages. Rental income from a live-in aide residing in a 1-unit primary residence that meets the requirements of Guide Section 5306.2 is acceptable. Additionally,  rental income generated from an ADU on a subject 1-unit primary residence that meets the requirements of Guide Section 5306.3 is also eligible.