Freddie Mac has announced changes to their Home Possible mortgage program. Freddie Mac’s Home Possible and Fannie Mae’s Home Ready mortgage programs offers competitive pricing with interest rates and reduced private mortgage insurance premiums for home buyers.
Home buyers must meet certain income limits based on the location of the subject home that is being financed. The income restrictions are based on the area median income (AMI).
Effective later next month, Freddie Mac will no longer allow incomes over 80% of the area median income for the Home Possible program.
From Freddie Mac:
“We are updating our requirements to state that the Borrower’s qualifying income, converted to an annual basis, must not exceed 80% of the AMI for the location of the Mortgaged Premises. This change will apply to all Home Possible Mortgages, including those secured by properties in low-income census tracts.
This change will sharpen our focus on serving very low- and low-income Borrowers and First-Time Homebuyers. At the same time, the changes will help us better manage to the overall market environment, regulatory requirements and the interest of taxpayers.”
As of the writing of this post, Fannie Mae has not reduced income limits to their Home Ready program which has some areas without income restrictions.
If you are currently preapproved to buy a home using Freddie Mac Home Possible, you should contact your Loan Officer ASAP to make sure that you’re not impacted by this change. It’s possible that you may need to switch to the Fannie Mae Home Ready to keep your preferred pricing.
Freddie Mac Home Possible and Fannie Mae Home Ready are also available for refinancing homes!
If you’re considering buying or refinancing a home located anywhere in Washington state, where I’m licensed, please contact me! I am happy to help you with your mortgage needs.