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Freddie Mac HomeOne

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Homebuyers who have a high income, but also low savings, may be able to buy a home with just 3% down if they qualify for the Freddie Mac HomeOneⓇ mortgage. Unlike other low-down-payment, conventional first-time homebuyer programs, there are no income limits. We’ll explain how the HomeOne mortgage works — as well as compare it to other first-time buyer loans — to see if it’s the right fit for your home purchase or refinance needs.

What is the Freddie Mac HomeOne mortgage?

The Freddie Mac HomeOne mortgage is a low-down-payment program for first-time homebuyers with guidelines set by the Federal Home Loan Mortgage Corporation (FHLMC), more commonly known as Freddie Mac. Eligible buyers can purchase homes with only 3% down payment, regardless of income or buying location.

Cash-strapped buyers can purchase one-unit homes with conforming loan limits up to $647,200 in most parts of the country. Buyers purchasing expensive homes in high-cost areas of the U.S. may be eligible for loan amounts as high as $970,800, which is the maximum high-cost conforming limit in 2022.

The HomeOne mortgage can also be used to refinance a home, as long as no cash is taken out. There is a drawback, however: The loan being refinanced must also be a Freddie Mac-serviced loan. Homeowners can use the Freddie Mac Loan Look-Up Tool to verify this information.

How the HomeOne mortgage works

Getting a HomeOne mortgage is similar to getting any other first-time homebuyer loan.

You’ll need to apply with a lender that offers the program. Most lenders offer both Fannie Mae and Freddie Mac loan programs. However, make sure to check with your loan officer if you apply specifically for the HomeOne mortgage.

You may need to take a homebuyer education course. If you’re a first-time homebuyer buying on your own, you’ll need to take an approved homebuyer education course. You can skip the course if at least one co-borrower has owned a home before.

You’ll provide income, asset and credit documentation. Lenders vet your paystubs, W-2s and bank statements, and will need to verify a valid credit score that meets the program requirements.

You’ll need to pay mortgage insurance. The mortgage insurance premiums for the HomeOne mortgage are slightly higher than the Freddie Home Possible® loan. Mortgage insurance covers lender losses if you can’t make payments and go into mortgage default.

You can only take out a fixed-rate mortgage. Adjustable-rate mortgages (ARMs) aren’t permitted.

HomeOne eligibility requirements

Although the HomeOne program allows higher-income earners to qualify for the program, there are some added restrictions that come with that flexibility. The table below shows the minimum mortgage requirements for the HomeOne program.

Type of requirementHomeOne guideline
First-time homebuyerAt least one borrower must have had no ownership in a residential home in the last three years
OccupancyAll borrowers must live in the home as their primary residence
Eligible properties1-unit homes Planned unit developments Condominiums
Down payment3%
Credit scoreAt least one borrower must have a usable credit score of at least 620
Debt-to-income (DTI) ratioThe total debt compared to verified gross income can’t exceed 45%
Homeownership educationRequired if all borrowers are first-time homebuyers
Home appraisalRequired for all HomeOne purchases and refinances

HomeOne income limits

The Freddie Mac HomeOne program doesn’t set any limits on income. It’s a good option for borrowers who only have a 3% down payment and earn more than the median income requirements set for the Fannie Mae HomeReady® or Freddie Mac Home Possible programs.

Pros and cons of a HomeOne mortgage

You won’t be subject to income limitsYou or a co-borrower must be a first-time homebuyer
You only need a 3% down paymentYou can’t purchase a second home or investment home
You won’t be subject to location restrictionsYou can’t purchase a manufactured or multifamily home
You can leave more cash in the bank for home repairs or an emergency fundYou’ll pay slightly higher mortgage insurance premiums than other first-time homebuyer programs

HomeOne vs. Home Possible

Freddie Mac offers another 3% down payment loan program: the Freddie Mac Home Possible loan. The Home Possible program is designed for lower-income borrowers and gives more flexibility for the types of properties you can buy. Below is a side-by-side glance at the biggest differences between the two programs.

HomeOneFreddie Mac HomePossible
No income limitsIncome limits vary depending on location
Only one-unit homes permittedMultifamily (two to four units) and manufactured homes allowed
Fixed-rate loan options onlyAdjustable-rate loan options available

Alternatives to a Freddie HomeOne mortgage

There are several other loan programs to consider besides the Freddie HomeOne mortgage. Below is a brief description of each.

Fannie 97%. This 3% down payment program is offered by Fannie Mae, which is a government-sponsored enterprise (GSE) similar to Freddie Mac. Like the HomeOne program, there are no income limits.

Fannie Mae HomeReady. The HomeReady program is similar to Freddie Mac’s Home Possible program, with a 3% down payment requirement and income limits for qualified borrowers.

FHA loans. The Federal Housing Administration (FHA) insures loans for borrowers with scores as low as 580, requiring only a 3.5% down payment. There are no income limits, but borrowers pay two types of mortgage insurance (conventional loans only require one type of mortgage insurance).

VA loans. Eligible military borrowers can purchase a home with no-down-payment financing backed by the U.S. Department of Veterans Affairs (VA). No mortgage insurance is required.

USDA loans. Low-income borrowers purchasing homes in designated rural areas may qualify for a no-down-payment loan backed by the U.S. Department of Agriculture (USDA).

The table below shows you how the HomeOne loan guidelines stack up against the alternatives listed above.

Loan requirementHomeOneFannie 97%HomeReadyFHA loanVA loanUSDA loan
Down payment3%3%3%3.5%0%0%
First-time homebuyer requiredYesNoYesNoNoNo
Income limits NoNoYesNoNoYes
Credit score minimum620620620580No guideline minimumNo guideline minimum
Loan limits$647,200 for most areas$647,200 for most areasBased on area median income limits$420,680 for most areasNoBased on USDA income limits
Property type limitsYesYesNoNoNoNo


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