Freddie Mac BorrowSmart Access: What To Know
Achieving homeownership is a huge milestone. For many aspiring homeowners, the Freddie Mac BorrowSmart Access program* offers a way to get there faster, even if saving for a down payment and closing costs feels daunting.
This program eases those upfront costs, especially for first-time homebuyers and individuals in underserved communities. So, if you’re eager to make your homeownership dreams a reality, Freddie Mac BorrowSmart Access might just be the boost you’re looking for.
What is Freddie Mac BorrowSmart Access?
The Freddie Mac BorrowSmart Access program is a down payment and closing cost assistance program created for eligible borrowers, including those in certain income brackets or who may face financial hurdles in securing a home loan.
The purpose of BorrowSmart Access is to support potential homeowners by lightening the financial load when they’re ready to purchase a home.
The program is meant to be a supportive step forward for those who are close to homeownership but need just a little help to get there.
How Do I Qualify for Freddie Mac’s BorrowSmart Program?
So, what does it take to qualify for BorrowSmart Access? The eligibility criteria depends on several factors, including the area median income (AMI), as well as other borrower requirements like property location.
For instance, those applying must fall within certain income limits based on AMI, ensuring that support reaches people who genuinely need it.
The program is also focused on primary residences, so if you’re planning to live in the home this program could provide more financial assistance throughout your homeownership process.
Is BorrowSmart Only for First-Time Buyers?
While Freddie Mac BorrowSmart Access is ideal for first-time homebuyers, it’s not limited to them. Eligible borrowers from various backgrounds can qualify, provided they meet the program's eligibility criteria.
This inclusivity means that even if you’re not a first-timer, BorrowSmart might still be useful for you if you fall within qualifying income brackets.
Financial Assistance and Grant Amounts
BorrowSmart provides flexible financial assistance that can vary based on borrower eligibility and income. This assistance might come as grants for your down payment or closing costs.
The program doesn’t operate on a one-size-fits-all basis, which means amounts can vary based on factors like the borrower’s income level and location.
Do I Have to Repay the Down Payment Assistance?
In many cases, BorrowSmart Access provides assistance as a grant, which means you don’t have to repay it.
This feature makes BorrowSmart highly attractive to borrowers who need financial support but don’t want the added pressure of future repayments.
However, it’s always a good idea to review specifics with your lender, as loan programs can sometimes have variations based on location or individual terms.
What Are the Requirements for a Freddie Mac Loan?
If you’re considering a Freddie Mac loan, here are the key requirements you’ll want to keep in mind. From credit score standards to the need for certain income documents, Freddie Mac loans come with specific conditions.
Minimum Credit Score and Credit History Standards
Credit score matters. Freddie Mac requires a minimum credit score to help ensure borrowers are financially stable enough for a mortgage loan.
While the exact score may vary, Freddie Mac looks for borrowers with a stable credit history, aiming to balance accessibility with financial responsibility.
Income and Employment Verification
Freddie Mac loans require applicants to provide proof of income and employment. This verification process ensures that borrowers have a reliable income source to support their mortgage payments.
The program often factors in qualifying income based on the area median income (AMI), making sure that those who most need assistance are covered.
Down Payment and Asset Requirements
Freddie Mac offers flexibility with down payments, especially through BorrowSmart and its related down payment assistance programs.
Freddie Mac loans generally require smaller down payments than many conventional options, making them attractive to those without a lot of savings. However, having a certain level of assets or reserves can be beneficial for applicants.
Can You Have a Non-Occupant Co-Borrower on a Home Possible Loan?
Yes, you can. Freddie Mac’s Home Possible loan program allows for non-occupant co-borrowers, like family members, to support your application.*
This flexibility can help borrowers meet income eligibility more easily, making Home Possible a great fit for those who may need extra financial backing without having the co-borrower live on the property.
Property and Occupancy Standards
Freddie Mac loans require that the property being financed serves as the borrower’s primary residence. This requirement means no second homes or investment properties are allowed; the home must be owner-occupied.
Eligible property types include single-family homes, condos, and townhomes that meet Freddie Mac’s underwriting and safety standards.
How Does Freddie Mac BorrowSmart Access Compare to Other Programs?
BorrowSmart Access isn’t the only down payment assistance program out there. Here’s a closer look at how it stacks up against other popular options:
BorrowSmart Access vs. Conventional Loan Programs
Unlike conventional loan programs, Freddie Mac BorrowSmart Access SM offers unique support for down payments and closing costs, which standard loans typically don’t cover.
BorrowSmart stands out as a special purpose credit program that helps underserved communities access real estate, providing financial assistance that conventional options may lack.
BorrowSmart Access vs. FHA Loans
FHA loans are popular for low down payment options but often include mortgage insurance premiums that can raise costs significantly.
BorrowSmart provides down payment assistance without requiring mortgage insurance premiums, which makes it a more affordable choice in the long term for many borrowers.
BorrowSmart Access vs. USDA Rural Development Loans
USDA Development loans offer zero-down-payment options but are geographically limited to rural and suburban areas.
Freddie Mac BorrowSmart Access is available in a broader range of locations, including major metropolitan areas like Texas and St. Louis, making it accessible to more buyers who qualify.
BorrowSmart Access vs. VA Loans
VA loans provide no-down-payment options and low-interest rates for veterans, offering excellent terms for those who qualify.
BorrowSmart, on the other hand, serves a more extensive audience, including first-time buyers and low-to-moderate income applicants. It’s a solid choice for borrowers who don’t meet VA loan requirements but still need financial support.
Freddie Mac’s Other Loan Options
Freddie Mac’s HomeOne mortgage program is another option for low down payment assistance, focused on providing affordable paths to homeownership.
BorrowSmart Access pairs well with HomeOne for eligible borrowers, creating a stronger foundation for managing upfront costs.
Key Cost and Fee Differences
Costs and fees are essential factors when selecting a loan program. BorrowSmart’s down payment and closing cost assistance reduce initial expenses, making homeownership more achievable.
As always, connecting with a trusted loan officer can help you understand the fee structures associated with each program.
How to Apply
With Freddie Mac BorrowSmart Access, achieving homeownership can become a reality sooner than you might think.
From down payment support to tailored guidance for first-time buyers, this program clears many of the obstacles that keep homeownership out of reach for so many.
And for those ready to take the next step, Rate’s Same Day Mortgage lets you secure financing faster, making the journey from pre-approval to homeownership as seamless as possible.
Get started today with Rate’s Same Day Mortgage pre-approval to see how quickly you could be on the path to your new home!
*Owner occupied residence must be located in one of 10 metropolitan statistical areas. List of eligible areas available upon request. Borrower must have a Freddie Mac Home One mortgage or a standard conventional mortgage. Pre purchase counseling from a HUD approved agency is required. Subject to credit and underwriting approval. Restrictions apply.
Guaranteed Rate, Inc. is a private corporation organized under the laws of the State of Delaware. It has no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the US Department of Agriculture, or any other government agency.