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Torres & Co. Lending > First-Time Homebuyer Programs > Home Possible

Home Possible

Home Possible Loan Program

The Home Possible Loan Program, offered through Freddie Mac, is a Conventional mortgage designed to help low-to-moderate income borrowers achieve homeownership with flexible guidelines and down payments as low as 3%. It’s especially popular with first-time buyers who want a strong alternative to FHA.

What Is Home Possible?

Home Possible is a low down payment Conventional loan tailored for first-time buyers and qualifying repeat buyers. It allows you to purchase a primary residence with just 3% down, while also providing reduced mortgage insurance costs and flexible credit requirements.

How It Works

  • Down Payment: Minimum 3%.
  • Credit Score Requirement: Minimum FICO of 620 (higher scores get better pricing).
  • Income Limits: Household income must be at or below 80% of the Area Median Income (AMI) for the property location. (Check eligibility: Freddie Mac Home Possible Income Tool).
  • Mortgage Insurance: Required if less than 20% down, but cancellable once 20% equity is reached.
  • Property Types: 1–4 unit primary residences, condos, and PUDs (Planned Unit Developments).

Benefits

  • Only 3% down required.
  • Lower monthly mortgage insurance compared to FHA loans.
  • Flexibility with  gift funds and other down payment sources.
  • Co-borrowers can help qualify (including non-occupant co-borrowers like parents).
  • Allows ownership of additional financed properties (under certain conditions).
  • Education course prepares buyers for success.

Fun Facts & Insider Details

  • Sweat Equity Allowed: Borrowers can use labor or materials they contribute toward the property as part of their down payment (unique feature).
  • Rental Income Flexibility: Rental income from units in the property (if 2–4 units) can help qualify.
  • Gift Funds: 100% of the down payment can come from gifts.
  • Reduced Mortgage Insurance Coverage: MI coverage requirements are lower than standard Conventional loans, lowering monthly payments.

Who Is the Best Candidate for Home Possible?

  • First-time buyers with limited savings.
  • Buyers purchasing in areas with income at or below AMI.
  • Borrowers who want a Conventional loan instead of FHA for reduced long-term costs.
  • Buyers looking at multi-unit homes (2–4 units) where rental income can help qualify.

FAQs – Home Possible

  • No. Repeat buyers may qualify as long as they meet the income limits.

  • No. It’s only for primary residences.

  • No. PMI can be cancelled once you have 20% equity.

  • Yes. Home Possible allows borrowers to contribute labor or materials to offset costs.

Next Step

Think Home Possible may be the right program for you? Let’s confirm eligibility and explore your options.

Apply Now

⚖️ Disclaimer: This guide is for educational purposes only. Loan approval and terms depend on credit, income, assets, property type, and program guidelines.

Torres & Co. LendingHome Possible