Many homebuyers have a tough time saving up 20 percent of a home’s purchase price to use as a down payment. In fact, it can seem like such a big task that many people choose to continue renting rather than building up such a substantial amount of money.
However, there are programs available, including the VA loan program and the FHA loan program, that don’t require a 20 percent down payment. Recently, the Freddie Mac Home Possible Advantage loan program has made it possible to buy a home with as little as 3 percent down.
Could that be the right program for you if you’re buying a home in Franklin, Brentwood or any of the surrounding communities?
What is the Home Possible Advantage Mortgage Program?
Designed for low- to moderate-income buyers, the Freddie Mac Home Possible Advantage Mortgage program helps people buy homes when they have limited savings.
The program requires only a 3 percent down payment with qualifying credit. Some participants – particularly those on the lower end of the credit score spectrum – may need to come up with a higher down payment.
Who Qualifies for Home Possible Advantage Mortgages?
To qualify for a Home Possible Advantage Mortgage loan, you’ll need to:
- Meet Freddie Mac’s minimum credit requirements, which means you need a credit score of at least 660.
- Earn no more than 100 percent of your area’s median income. You can find your county and the maximum income eligibility here.
- Participate in a qualifying borrower education program if you’re a first-time buyer. The program must meet the National Industry Standards for Homeownership Education and Counseling.
Will You Need Private Mortgage Insurance With a Home Possible Mortgage?
Any mortgage loan backed by Freddie Mac that requires less than a 20 percent down payment will require the borrower to purchase private mortgage insurance, or PMI. Private mortgage insurance protects the lender if you later default on your loan.
The amount of money you pay for PMI will depend on your loan-to-value ratio, which simply refers to what you owe on your mortgage versus its value.
Are You Buying a Home in Williamson County or Davidson County?
If you’re buying a new home in Williamson County or Davidson County, we can help you.
While you’re here, please explore our:
- Nashville real estate listings
- Brentwood real estate listings
- Franklin real estate listings
- Spring Hill and Thompson’s Station real estate listings
- Nolensville real estate listings
Call us at 615-473-5973 or contact us online to tell us what you’re looking for in your next home. We’ll be happy to help you find the perfect place to live.