If you have been looking at homes you’ve probably heard the phrase “Home Ready” and “Home Possible”.   These are common first time home buyer loans because they only require a 3% down payment and have reduced mortgage insurance requirements.  What a lot of people do not know?  Home Ready and Home Possible are restricted by income limitations, like most first time home buyer programs, the amount of income a household makes influences the loan.

How We Get Around These Limitations:

Introducing Freddie Mac’s “Home One” loan.  It shares traits with the home possible and home ready loans but does not have the same income limitations.  Therefor it opens the door for the majority of first time home buyers.  Studies have found that first time home buyers tend to have a household income higher than the standard limitations.  So this loan was created in an effort to secure financing for these clients.

 

Home One VS. FHA Loans

FHA loans have been the gold standard for first time home buyers for some time.  But conventional loans are stepping up their game and offering a better alternative.

 

Up Front Mortgage Insurance Mortgage Insurance Cancels Easier Appraisal Mortgage Insurance Cost
Home One                   No                  Yes           Yes Minimal with Good                score
FHA                  Yes                 No           No              85%

Home One VS. Home Possible / Home Ready Loan

Reduced Mortgage Insurance 3% Down Payment Works with First Time Home Buyer Grants Income Limitations
Home One            Yes Yes Yes No
Home Possible / Home Ready           Yes Yes Yes Yes

 

 What Properties Qualify For This Loan?

 There are not many exclusions for this loan, you are eligible to buy a variety of properties that include:

  • Single Family Homes
  • Condos
  • Town Homes

 

Exclusions:

  •  Manufactured Homes
  • Hobby Farms
  • Investment Properties

 

Basic Loan Requirements

Much like any first time home buyer program, Freddie Mac requires you to go through some standard buyer tests that gauge your real estate knowledge.  Simple multiple choice tests.

The Take Away

You can see the loans are very similar, but now buyers can take advantage of first time incentives without concerning themselves about income limitations.  If your joint household income exceeds $77,000 (in most cases) you are no longer omitted from these benefits.  2019 is a good time to buy a home.

What Can I Do Now?

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Justin Scott

Loan Officer

NMLS 878581

  1. C) 920-530-4484
  2. O) 920-490-8823
  3. F) 920-490-8967

       Executive Mortgage

      NMLS 271650

 909 . E Walnut Street

Green Bay WI 54301

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