For most people, saving up the 20 percent down payment to purchase a home is tough. Until recently, the only way most people could get a conventional mortgage with less than 20 percent down was to purchase with a VA loan or an FHA loan – but the Freddie Mac Home Possible Advantage mortgage, which has only been available for a little over a year, is changing that.
The Freddie Mac Home Possible Advantage Mortgage Loan
Designed to help low-income and moderate-income borrowers with limited savings, the Freddie Mac Home Possible Advantage mortgage loan is a way for many people to qualify for a home purchase with as little as 3 percent down.
Qualifying for the Freddie Mac Home Possible Advantage Mortgage Loan
In order to qualify for a Freddie Mac Home Possible Advantage mortgage loan, you’ll need to have a credit score of 660 or higher if you’re making a home purchase. (The same type of loan is available for those who are refinancing, and the minimum credit score is 680 in that instance.)
If your credit fits the bill, you’ll need to earn no more than 100 percent of your area’s median income. The median income is subject to change, so it’s a good idea for you to use Freddie Mac’s Affordable Income and Property Eligibility calculator to determine what it is when you want to apply for this type of loan.
After you’ve determined whether you meet the income requirements, you’ll be required to participate in a borrower education program such as Freddie Mac’s CreditSmart.
What Are Down Payments Like With the Freddie Mac Home Possible Advantage Program?
You may be able to put down as little as 3 percent of the home’s selling price if you’re using the Freddie Mac Home Possible Advantage mortgage loan program. However, if you take advantage of the lower down payment, you’ll likely need to pay private mortgage insurance premiums (this is commonly referred to as PMI).
Most people can stop paying PMI once they’ve built equity of at least 20 percent in their homes.
Are You Buying a Home in Williamson County or Davidson County?
If you’re thinking about buying a home in Middle Tennessee, explore the real estate listings in our communities. You can explore:
- Nashville homes for sale
- Brentwood homes for sale
- Franklin homes for sale
- Spring Hill homes for sale
- College Grove homes for sale
- Thompson’s Station homes for sale
- Arrington homes for sale
When you’re ready to explore real estate listings, call us at 615-425-8049 or get in touch with us online. We’d love to help you find your next home in beautiful Middle Tennessee!