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The Freddie Mac HomeOne Mortgage Program

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Homebuyers who have high incomes but low savings may be able to buy a home with just 3% down, if they can qualify for the Freddie Mac HomeOne® mortgage. Unlike some other low-down-payment programs for first-time homebuyers, with HomeOne, there are no income limits. We’ll explain how the HomeOne mortgage works — and compare it to similar loan programs — 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 that fall within conforming loan limits — up to $726,200 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 $1,089,300, which is the maximum high-cost conforming limit in 2023.

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.

  1. You’ll need to apply with a lender that offers the program. Most lenders offer both Fannie Mae and Freddie Mac loan programs. Check with your loan officer if you apply specifically for the HomeOne mortgage, however.
  2. You may need to take a homebuyer education course. If you’re a first-time homebuyer purchasing on your own, you’ll need to take an approved homebuyer education course. There are free options, and you can skip the course if at least one co-borrower has owned a home before.
  3. You’ll provide income, asset and credit documentation. Lenders vet your pay stubs, W-2s and bank statements, and will need to verify a valid credit score that meets the program requirements.
  4. You’ll need to pay mortgage insurance. Mortgage insurance covers lender losses if you can’t make payments and go into mortgage default. You’ll have to purchase a minimum amount of coverage based on your loan’s LTV and use an approved insurer.
  5. 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, there are some added restrictions that come with that flexibility. The table below shows the minimum mortgage requirements for the HomeOne program.

Requirement typeHomeOne guideline
First-time homebuyerAt least one borrower must have had no ownership in a residential property in the last three years
OccupancyAll borrowers must live in the home as their primary residence
Eligible propertiesOne-unit homes
Planned unit developments
Down payment3%
Credit scoreAt least one borrower must have a usable credit score
Debt-to-income (DTI) ratioThe total monthly debt compared to verified gross income can’t exceed 45%
Homeownership educationRequired if all borrowers are first-time homebuyers

  Beware of extra fees for high-DTI loans

As of August 1, 2023, conventional loan borrowers with a DTI over 40% will face higher interest rates or an extra fee at closing. The fee will apply to loans with an LTV over 60% and will range from 0.25% to 0.375% of the loan amount.

HomeOne income limits

The Freddie Mac HomeOne program doesn’t set any limits on income. This makes it a good option for borrowers who only have a 3% down payment but 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 limits  You or a co-borrower must be a first-time homebuyer
  You only need a 3% down payment  You can’t purchase a second home or investment property
  You won’t be subject to location restrictions  You can’t purchase a manufactured or multifamily home
  You can leave more cash in the bank for home repairs or an emergency fund  You must live in the home as your primary residence

HomeOne vs. Home Possible

Freddie Mac’s 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.

No income limits
Allows multifamily homes (two to four units)
Allows manufactured homes
Allows adjustable-rate loans

Alternatives to a Freddie Mac 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 and requires only a 3.5% down payment for those with a minimum 580 credit score. 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, but you will have to pay a VA funding fee ranging between 1.40% and 3.60% of the loan amount.

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 required
Income limits
Credit score minimum660620620580 with 3.5% down;
500 with 10% down
No guideline minimumNo guideline minimum
Loan limits$726,200 for most areas$726,200 for most areas$726,200 for most areas$472,030 for most areasVaries by county
Property type limits

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