Freddie Mac (FHLMC) offers programs for conventional financing. Federal Housing Authority (FHA) offers programs for government financing.
Freddie Mac Home Possible Advantage vs FHA
- Home Possible Offers - 97% LTV
- Allows for non-occupying co-borrowers
- Does not require minimum reserves
- Allows down payment from sources other than from applicant
- Income cannot be greater than 100% of median income in higher income areas
- No cap on percentage of median income if property located in underserved areas
- At closing, the buyer cannot own other property
- Mortgage insurance is around $123 on $100,000 loan (payment varies via several factors)
- Mortgage insurance cancels if value grows to 22% equity, payments made on time and area is not depreciating
- Allows for Lender Paid Mortgage Insurance (LPMI – Possible higher rate, but possible lower payment)
- Homebuyer Education required
- Allows for down payment assistance
- Minimum score of 660 requirement
FHA
- FHA offers – 96.5% LTV
- Allows for non-occupying co-borrowers
- Does not require minimum reserves
- Allows down payment sources other than from applicant
- No cap on income, however there is a cap on the loan amount per county
- At closing, buyer can own other property
- Mortgage insurance is lower because a portion of insurance is financed into the loan
- Mortgage insurance never cancels
- LPMI not allowed
- No Homebuyer Education required
- Allows for down payment assistance
- No minimum score requirement (score set by lender)
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