Freddie Mac’s Home Possible Mortgage is a great mortgage program designed for first time home buyers. What’s so special about this program is that it allows a home buyer to qualify for dramatically reduced mortgage insurance premiums with a minimum down payment. The down payment may be gifted by a family member. No reserves are required for a single family dwelling.
Sellers may contribute up to 3% of the sales price towards allowable closing cost, prepaids or reserves. This can include an upfront private mortgage insurance premium if the borrower opts for a “single premium” structure instead of having it paid for monthly in their mortgage payment.
There are income limits unless the borrower is buying in an “underserved area census tract” as designated by Freddie Mac.
For purchase transactions when all of the borrowers are first time home buyers, then at least one of the borrowers must attend a home ownership education class. NOTE: this is different than Home Advantage or the other programs offered by the Washington State Housing Finance Commission where ALL proposed borrowers (anyone who will be on the mortgage) must attend a class.
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