Freddie expands 3 percent down loans for new buyers
Freddie Mac is debuting a new 3-percent down payment option for qualified first-time buyers that could put it in direct competition with the Federal Housing Administration’s low down payment mortgage. The mortgage giant announced last week that it is rolling out a new conventional option called HomeOne, which will not have any geographic or income restrictions.
Freddie Mac rolled out conventional mortgages with 3 percent down payments more than three years ago for qualified low- and moderate-income borrowers. Its HomeOne product will not replace its current Home Possible products, but instead serve as a complement to it, Freddie Mac officials say.
HomeOne mortgages will be offered only for conforming fixed-rate mortgages that are secured by a one-unit primary residence. At least one of the borrowers must be a first-time buyer. Also, applicants are required to participate in homeownership education to qualify for the mortgage. The loan is available for single-family homes, condos, and townhomes. Manufactured homes are not eligible.