— ABOUT HOME POSSIBLE®

Home Possible® is a conventional mortgage program offered through Freddie Mac and designed specifically to expand access to homeownership for low-to-moderate income borrowers. With a down payment requirement as low as 3% for eligible buyers, income-based qualification guidelines, and reduced mortgage insurance costs relative to standard conventional financing, the program is structured to make conventional homeownership achievable for borrowers who might otherwise be directed toward higher-cost alternatives.

Home Possible® is available to both first-time and repeat buyers who meet program eligibility requirements. It is not limited to first-time purchasers, though it is particularly well-suited to buyers who are entering homeownership for the first time or returning to the market after a period of renting.

Pacific Home Loans offers Home Possible® financing as part of a broader platform of first-time and affordable homeownership programs. When evaluating eligible buyers, we assess Home Possible® alongside comparable programs – including Fannie Mae’s HomeReady® — to identify the structure that best serves the borrower’s specific financial profile.

→ First-Time Homebuyer Loan Programs

— PROGRAM FEATURES

Flexible Income Sources
The program is designed to accommodate a variety of qualifying income types, including employment income, part-time income, self-employment income subject to documentation requirements, and in certain circumstances, boarder income. The ability to include rental income received from a boarder — a renter occupying a room within the primary residence — can be particularly meaningful for buyers in multi-generational households or those seeking to offset housing costs through shared living arrangements.

Reduced Mortgage Insurance
Home Possible® offers mortgage insurance rates that are more favorable than standard conventional PMI for eligible borrowers at comparable loan-to-value ratios. Private mortgage insurance on a Home Possible® loan is also cancellable once the borrower’s equity in the property reaches the applicable threshold established under the Homeowners Protection Act — unlike FHA mortgage insurance, which remains for the life of the loan in most cases.

Non-Traditional Credit Consideration
Borrowers who do not have a traditional credit profile — those without established trade lines or credit score history — may still be eligible for Home Possible® provided at least one borrower on the transaction meets minimum credit requirements. This provision extends program access to buyers who have managed financial obligations responsibly but have limited credit history on record.

Homebuyer Education Requirement
At least one borrower on the transaction is required to complete an approved homebuyer education course prior to closing. Freddie Mac’s CreditSmart® Homebuyer U platform satisfies this requirement and is available at no cost. Completion of this requirement should be initiated early in the process to avoid delays at the time of closing.

→ Home Buyer Counseling
→ Freddie Mac CreditSmart® Homebuyer U

— ELIGIBLE PROPERTY TYPES

Home Possible® financing is available for the following primary residence property types, subject to Freddie Mac guidelines:

• Single-family homes (1-unit)
• Eligible condominiums (subject to project approval)
• Planned unit developments (PUDs)
• Manufactured homes (subject to specific program guidelines)
• 2–4 unit properties, subject to occupancy and reserve requirements

Home Possible® is available for primary residence purchases only. It may not be used for second homes or investment properties.

Condominium Considerations
Condominium financing under Home Possible® requires that the project meet conventional warrantability standards. Project eligibility – including owner-occupancy ratios, HOA financial standing, and litigation status – must be confirmed prior to proceeding. In resort and vacation destination markets where project eligibility may be more complex, alternative financing structures may be appropriate.

→ Buying a Condo
→ PrimeResort™ Condo Financing

— COMPARING OPTIONS

Home Possible® vs. HomeReady® (Fannie Mae)
Home Possible® and HomeReady® are structurally similar programs offered by competing agencies — Freddie Mac and Fannie Mae, respectively. Both offer 3% down payment options, income-based eligibility, and reduced mortgage insurance for qualifying borrowers. Differences exist in how each program treats specific income types, boarder income, and non-occupant co-borrowers. When a borrower qualifies for both, a direct comparison of the specific terms available is the appropriate basis for program selection.

→ HomeReady® Loan

Home Possible® vs. FHA
FHA financing offers a 3.5% down payment and more flexible credit guidelines than Home Possible®, but carries mortgage insurance for the life of the loan in most cases. Home Possible® offers a lower down payment threshold (3%) and cancellable mortgage insurance, but applies income limits that FHA does not. For borrowers who meet Home Possible® income requirements and have adequate credit, the conventional structure is often more cost-effective over time. For borrowers whose credit profile benefits from FHA’s more accommodating guidelines, or whose income exceeds Home Possible® limits, FHA may be the appropriate alternative.

→ FHA Loan

Home Possible® vs. VA
For eligible veterans and service members, the VA loan remains the superior option in most circumstances — offering zero down payment and no mortgage insurance. Home Possible® is the appropriate consideration for borrowers who do not qualify for VA financing.

→ VA Loan

— COMMON QUESTIONS