Both the Home Possible and Home Possible Advantage programs help first-time home buyers. What’s more, neither program restricts “move-up” buyers. However, to use either program you cannot have an ownership interest in any other residential property. For example, if you are a move-up buyer, you must sell your current home before taking on a Home Possible loan. Here’s some good news: you can close both the home you’re selling and the home you’re buying on the same day.

Because the Home Possible loan programs are designed for low to moderate-income borrowers, income limits apply. To be eligible for either mortgage program, your income cannot exceed the Area Median Income (AMI) where the property is located.

Freddie Mac guidelines also require stable monthly income for all borrowers who sign the mortgage note (not merely household income). Stable means a 2-year income history that is reasonably expected to continue.

• Fixed Rate Mortgages
• 5/1 ARM (excluding manufactured homes)
• 7/1 AM
• 10/1 ARM

Applying for a loan is straightforward. You’ll need to gather a few documents before you start. Most of them will be available in a digital format, as PDF files, that you can send to your loan advisor (or upload to the online application form they provide). Here’s what you’ll need to get the ball rolling:

• State issued ID, such as driver’s license or passport
• Paycheck stubs for the most recent 30 days
• W-2 forms from the past two years
• Bank Accounts – recent statements from all accounts, all pages, even if blank
• Tax returns – for the past two years
• P&L Statement – year-to-date profit & loss statement if self-employed
• Supplemental income – statement from retirement accounts, alimony, etc.

While very similar, each program is slightly different. The table below shows how they vary.