Freddie Mac HomeOne Conventional Loan Guidelines On Purchases

Freddie Mac HomeOne Mortgage Loan Program

Gustan Cho Associates are mortgage brokers licensed in 48 states

In this blog, we will cover the Freddie Mac HomeOne Mortgage Loan Program. Fannie Mae and Freddie Mac are the two government-sponsored enterprises (GSE). Freddie Mac and Fannie Mac sets the guidelines and lending requirements for conventional loans. The role of Fannie Mae and Freddie Mac is to provide market stability and liquidity by purchasing mortgages from lenders.

Freddie Mac and Fannie Mae are two different agencies but both have the same purpose. The main purpose of Freddie Mac and Fannie Mae is to provide liquidity in the housing market by buying mortgage loans funded by mortgage lenders. By buying mortgage loans from lenders, lenders have money to fund more loans. This is how Americans can purchase homes with a low down payments at competitive rates.

What Do Freddie Mac and Fannie Mae Do?

In order for Fannie and/or Freddie to purchase conventional loans, the mortgage needs to conform to Fannie Mac and/or Freddie Mac Guidelines. If the mortgage does not conform, Fannie and/or Freddie will not purchase the conventional loans. Lenders need to sell the mortgage loans they fund so they can clear their line of credit so can originate and fund more loans.

Both Fannie and Freddie are coming up with new loan programs to promote homeownership for home buyers, especially first-time homebuyers with a low down payment. Freddie Mac HomeOne Conventional Loans is one such program that is popular among first-time home buyers.

Freddie Mac HomeOne Down Payment Guidelines

Freddie Mac HomeOne is a special conventional loan program that benefits homebuyers with only a 3% down payment required. Freddie Mac HomeOne is a newly created conventional loan program. It allows home buyers to put in a 3% down payment. Freddie Mac HomeOne has no maximum income limit caps. Other loan programs do have maximum income limit caps.

How Does The Freddie Mac HomeOne Loans Benefit Homebuyers

The Freddie Mac HomeOne is a conventional loan program where home buyers only need a 3% down payment. Homebuyers can purchase homes anywhere in the United States. The loan program has no maximum income limit caps. Freddie Mac HomeOne allows up to 105% combined loan-to-value with Affordable Seconds. Homebuyers can purchase single-family homes, townhomes, and condominiums.

No minimum contribution by the borrower is required. Conventional loans have no upfront mortgage insurance premium. Annual private mortgage insurance can be canceled at 80% LTV. All 30-year fixed-rate FHA loans require an annual MIP of 0.85% for the life of the loan. Conventional loans allow Income-Based Repayment (IBR) whereas FHA loans do not.

How Do You Qualify For Freddie Mac HomeOne?

Borrowers need to meet all conventional loan guidelines:

  • One borrower needs to be a first-time homebuyer
  • A first-time homebuyer is defined as a borrower who had no ownership of a home for the past three years
  • must be a first-time homebuyer when the mortgage is a purchase transaction.
  • One unit properties (including Planned Unit Developments (PUD) and condominiums) are eligible
  • Need automated approval determined by the Automated Underwriting System – Loan Product Advisor
  • Gift funds are acceptable from family members

Does Freddie Mac HomeOne Require Homebuyer Education?
Freddie Mac HomeOne Home Buyer Education Certificate

All borrowers need to complete an online first-time homebuyer course which is the CreditSmart course. The home purchase needs to be an owner-occupant primary resident. Purchasing the mortgaged premises. First-time homebuyers are defined as someone who did not have ownership of a home in the past three years. Only one of the borrowers needs to be a first-time homebuyer.

What Is The Difference Between Home Possible and HomeReady

The Home Possible and HomeReady conventional loan programs were created and implemented to promote homeownership to first-time homebuyers and too low and/or moderate-income homebuyers. Borrowers can use the Home Possible Income and Property Eligibility tool to see if they meet the income guidelines. Borrowers can utilize the Area Median Income Lookup Tool for the HomeReady mortgage program. Borrowers need to meet all other conventional mortgage guidelines.

What Are The Benefits of Home Possible And HomeReady?

Here are the benefits of the Home Possible and HomeReady mortgage programs:

    • 3% down payment
    • 2 to 4 unit multi-family requires a 5% down payment as long as one of the units is owner-occupant
    • Homebuyers do not have to be first-time homebuyers

No Overlays Mortgage Lenders

Gustan Cho Associates Mortgage Group has no lender overlays on government and conventional loans. We have zero overlays on FHA, VA, USDA, and Conventional loans. Over 75% of our borrowers are folks who could not qualify at other lenders due to their lender overlays. If you need to qualify for a mortgage with a national mortgage company with no overlays on government and conventional loans, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at

The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays. Gustan Cho Associates are also experts in helping borrowers with Non-QM loans. Non-QM loans are non-conforming loans that benefit homebuyers who otherwise would not qualify for a government and/or conventional home mortgage.

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