Freddie Mac HomeOne Mortgage
Owning a home might feel like a dream that’s a bit out of reach, especially if you're a first-time buyer juggling the challenges of down payments, credit scores, and navigating the mortgage landscape.
But Freddie Mac’s HomeOne mortgage could be exactly what you need to turn that dream into reality.
With low down payment options, flexible requirements, and a straightforward process, the Freddie Mac HomeOne mortgage opens doors for first-time homebuyers seeking an affordable path to homeownership.
If you’re ready to take the next step, explore tailored loan options through Rate’s Same Day Mortgage and move closer to owning your new home with confidence.
What is Freddie Mac HomeOne?
The Freddie Mac HomeOne mortgage program is designed with accessibility in mind, making it easier for borrowers to buy a home with a down payment option as low as 3%.
Unlike some other programs, this one doesn’t have strict income limits, so more buyers can qualify, even if they earn above the area median income.
This flexibility makes HomeOne a strong choice for buyers looking for a conventional mortgage that still keeps affordability front and center.
Freddie Mac introduced the HomeOne program to broaden homeownership access.
With a homeownership education requirement by Freddie Mac’s CreditSmart course, HomeOne equips buyers with the know-how to make purchasing a home more accessible and sustainable.
How it Works
If you’re ready to dive into the homebuying process with the HomeOne program, here’s how it all works:
Application Process for HomeOne
Your journey begins by connecting with a loan officer who is approved to offer Freddie Mac loans. They’ll help you gather documents and assess your credit score, income, and other financial details.
Once your eligibility is confirmed, you’re on track for pre-approval, which puts you in a stronger position when it’s time to negotiate your home purchase.
This pre-approval process ensures you’re viewed as a serious buyer, giving you an edge in today’s competitive real estate market.
How Down Payment Works for HomeOne
A favorite feature of the HomeOne program is its low down payment requirement. With a loan-to-value (LTV) ratio of up to 97%, you can secure a home loan with a 3% down payment option. This is ideal if you don’t have much savings or are trying to minimize upfront costs.
Additionally, Freddie Mac allows a variety of down payment sources, like gifts from family members, making it easier for buyers without large personal savings.
HomeOne loans can apply to different residential properties, from single-family homes to eligible condominiums, ensuring flexibility in your home choice.
Is There a Minimum Credit Score to Qualify for a HomeOne Loan?
HomeOne does require a minimum credit score, though the exact figure depends on the lender. Generally, a solid credit profile is important, as it impacts not only your eligibility but also the interest rate you may receive.
So, if your usable credit score meets Freddie Mac’s requirements, this program could be your entry into homeownership. Lenders use Freddie Mac’s underwriting standards to evaluate credit risk, ensuring borrowers can manage mortgage payments consistently.
Does HomeOne Have Income Limits?
HomeOne has no specific income limits, which sets it apart from similar programs. Whether your income is above or below the area median income, you may qualify as long as you meet other eligibility criteria.
This flexibility makes HomeOne a good choice for buyers who might not qualify for other low-down-payment loan programs due to how much they make. Unlike programs like FHA loans, which have stricter income requirements, HomeOne keeps eligibility in reach.
Eligibility and Requirements
Freddie Mac HomeOne’s eligibility criteria are straightforward and designed to keep the program accessible to as many first-time homebuyers as possible.
Credit Score and Financial History
Freddie Mac reviews your credit score and financial history as part of its underwriting process. A decent credit history is essential, as it shows lenders (or servicers who manage your loan) you’re likely to make on-time payments on your mortgage loan.
Having a strong credit profile is key not only for getting approved but also for getting better interest rates, which make your monthly payments more affordable over time.
First-Time Homebuyer Requirement
HomeOne is specifically designed for first-time homebuyers but isn’t exclusive to them. If you haven’t owned a home in the past three years, you’re generally eligible, even if you’ve previously owned real estate.
This flexible requirement benefits buyers who may be re-entering the market or starting fresh after a period of renting.
What Are the Down Payment Requirements for Freddie Mac’s Homeone Mortgage?
Freddie Mac allows borrowers to use different down payment sources, including gift funds and grants. This flexibility can ease the financial pressure on first-time buyers who may not have large personal savings to draw from.
Covering down payments through creative sources gives HomeOne an edge over other loan programs, making homeownership more accessible to people with different levels of income.
Debt-to-Income Ratio Requirements
The HomeOne mortgage comes with debt-to-income requirements to ensure borrowers can comfortably handle monthly payments. Your debt-to-income ratio will be reviewed, along with your credit and financial profile.
This assessment aims to ensure buyers can keep reliable occupancy while preventing financial strain, ultimately supporting sustainable homeownership.
Can I Refinance with a HomeOne Mortgage?
While primarily designed for first-time buyers, refinancing options may be available in certain cases..
Contacting your lender is the best way to understand if refinancing a HomeOne Mortgage is possible and aligns with your financial goals.
Freddie Mac offers other programs that support refinancing needs, especially if you're looking to tap into your home’s equity.
Pros and Cons
Like any loan program, the Freddie Mac HomeOne mortgage has its perks and some potential drawbacks. Here’s a quick breakdown.
Pros
Low Down Payment Requirement
With as little as 3% down, the HomeOne mortgage makes homeownership achievable, even if your savings are minimal. This low down payment makes it an appealing choice against other conventional loan options.
No Income Limits
Unlike other Freddie Mac programs, HomeOne doesn’t have income limits, giving more homeowners access to affordable financing regardless of how much they earn.
Flexible Down Payment Sources
Freddie Mac allows funds from gifts and grants, so you’re not limited to personal savings alone when covering the down payment.
Competitive Interest Rates
HomeOne often offers fixed-rate mortgages with competitive rates, making long-term monthly payments predictable and affordable. Fixed rates can help keep your mortgage manageable over time.
Cons
Limited Loan Size
Although the HomeOne mortgage supports a high maximum LTV ratio, it may not be available for higher-cost properties in expensive real estate markets.
Private Mortgage Insurance (PMI)
With a low down payment, you’ll need to pay mortgage insurance until you reach a certain equity level, which could add to your monthly costs. PMI can be dropped later, but it’s a necessary part of a low-down-payment loan like HomeOne.
Credit Score Sensitivity
If your credit score is on the lower side, you may face higher interest rates or stricter approval requirements. Freddie Mac’s Loan Product Advisor provides insight and guidance on usable credit scores to determine your eligibility and terms.
Not Ideal for All Property Types
HomeOne is primarily for one-unit primary residences and is limited in property types. It may not be the best fit if you’re looking at manufactured homes or purchasing a second home.
Alternatives (HomeOne vs. Home Possible)
Freddie Mac offers other programs to make homeownership more accessible. Here’s how HomeOne compares to Freddie Mac Home Possible and other options.
What is the Difference Between Home Possible and HomeOne?
Both HomeOne and Home Possible* are designed for affordability, but Home Possible is tailored for low-to-moderate income buyers, with stricter income requirements based on the area median income.
HomeOne, on the other hand, has no income restrictions, making it easy to access for a broader range of buyers.
Eligibility Requirements Comparison
Home Possible includes income limits tied to the area’s median income, which limits access and eligibility for higher income earners and is primarily focused on low income or moderate income households.
On the other hand, HomeOne has no income caps, making it an inclusive choice for buyers who may not qualify for other loan programs because of their income.
Down Payment Differences
Both programs allow for low down payments, but Home Possible also allows secondary financing through Affordable Seconds - a program dedicated to helping borrowers who need additional financing purchase a home.
Difference Between HomeOne and Fannie Mae HomeReady
Similar to HomeOne, Fannie Mae’s HomeReady** program offers a low down payment option with flexibility in income.
However, HomeReady requires homeownership education and has specific guidelines for different property types like condominiums and planned unit developments.
If you’re considering either program, you can check Freddie Mac for more details on each program.
Which Option is Better for Refinancing?
Both HomeOne and Home Possible offer refinancing options, though Home Possible may have added flexibility with TLTV (total loan-to-value) requirements.
The best fit depends on your financial needs, so if you need more clarity, consulting with your lender and exploring Freddie Mac’s seller/servicer guide is recommended.
Other Alternatives
FHA Loans
For buyers with a low down payment and modest credit, FHA loans require a down payment option as little as 3.5%. Unlike HomeOne, FHA loans must have mortgage insurance throughout the loan term for down payments below 10%, which may increase long-term costs.
Conventional Loans
If you have a solid credit profile, conventional loans offer more flexibility, especially if you can put 20% down to avoid mortgage insurance entirely.
Unlike HomeOne, conventional loans are private and not government-backed, which can mean stricter eligibility but lower monthly costs with enough equity.
VA Loans
Exclusively for eligible veterans and active-duty members, VA loans require no down payment or mortgage insurance, making them highly affordable. However, these loans come with a funding fee and are limited to those with military service.
USDA Loans
USDA loans serve low- to moderate-income buyers in rural areas and require no down payment. They do come with income and location limits but offer lower mortgage insurance rates compared to FHA, making them an affordable rural option.
Get Pre-Approved and Start Your Journey Today
The Freddie Mac HomeOne mortgage is a powerful option for first-time homebuyers seeking flexibility and affordability in their journey to homeownership.
From low down payments to straightforward eligibility requirements, this loan makes buying a home more achievable than ever. If you’re ready to move forward, consider Rate’s Same Day Mortgage to jump-start the process.
With fast, reliable pre-approval, you’ll be prepared to seize the moment and secure your dream home on your terms.
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.
*Eligible borrowers must make less than 80% of Area Median Income. Available for first lien conventional mortgages for purchase and no cash-out refinances of owner occupied primary residences including condos, co-ops, and manufactured homes with additional requirements. Minimum down payment and FICO score requirements apply. Homeownership education may be required depending on transaction details. Applicants subject to credit and underwriting approval. Additional restrictions apply.
**For borrowers with up to 80% area median income with eligible transactions on qualified properties. Additional property restrictions and minimum borrower contribution requirements apply and vary based on number of units of subject property. Reserves may be required based on borrower's qualifying information. Homeownership education may be required. Subject to credit and underwriting approval. Restrictions apply.