Starting July 29th, first-time homebuyers will be able to apply for new Freddie Mac's HomeOne fixed-rate mortgage option, which requires only a 3 percent down payment.
Unlike Fannie Mae's 3 percent down program, HomeOne does not have income or geographic limitations, and only requires that one of the borrowers be a first-timer. Borrowers are subject to a risk assessment by Freddie Mac that includes a property appraisal component, along with a borrower evaluation discerning their ability to repay the loan, The Washington Post reports.
Those loan qualification requirements are meant to offset concern about low down-payment loans, which some people think were a contributing factor to the foreclosures during the housing crisis. Freddie Mac’s guidelines make sure that lenders evaluate whether the borrowers are qualified for the loan and can handle the payments. The guidelines also ensure that borrowers avoid the risks of an adjustable-rate mortgage. In addition, each borrower must take a home-buyer-education class.