Loans Buy a home Home Possible
Home Possible: Freddie Mac's 3% down loan
A conventional loan for low to moderate income buyers, with reduced mortgage insurance and flexible ways to fund the down payment, including your own work on the home.
New to this loan? Start here: How much you need saved A 3-minute lesson
Who it fits
Home Possible suits buyers with steady income and modest savings. It is especially useful when household income comes from more than one person, or when you are able to put your own work into the home.
Many households here combine several incomes or rent out a casita, and Home Possible is designed for that. Area income limits differ from county to county. Rural homes with acreage, wells and septic work when the property meets Freddie Mac’s standards.
Ways to cover the 3%
- Your own savings
- A gift from family
- Grants or down payment assistance, including local programs such as HomesFund in Durango. Most assistance is a loan with a second lien, so we compare the cost before you commit.
- Sweat equity: documented work on the home before closing
Home Possible or HomeReady?
Freddie Mac's Home Possible and Fannie Mae's HomeReady share the same 3% down, the same 80% income limit and reduced mortgage insurance. The differences are in the details: how a lender counts certain income, credit rules and pricing on a given day. As a Mortgage Broker, we can price both and show you which costs less.
Calculators and guides
- Mortgage payment calculatorYour full payment for each loan type, and where any payment goes.
- Best mortgages for first-time buyers in Southwest ColoradoHow the low-down options compare here
- Rent or buy calculatorWhat owning builds against renting and investing the difference.
- Down payment by loan typeThe down payment, loan and cash to close on each loan type.
- Cash to closeDown payment, closing costs and prepaids, less credits.
Common questions
What is sweat equity?
Work you do on the home before closing, such as painting or repairs, can count toward your down payment and closing costs when it is documented and valued.
Can rent from a roommate or casita help me qualify?
Yes. Documented boarder or accessory-unit rent can count for up to 30% of qualifying income. The renter generally needs to have lived with you at least 12 months.
Home Possible or HomeReady?
They are very similar. Small differences in credit rules, mortgage insurance and income counting can make one fit better. We price both and show you the difference.
Is Home Possible only for first-time buyers?
No. Repeat buyers qualify as long as income is within the area limit.