Great news for homebuyers! Fannie Mae HomeReady® and Freddie Mac Home Possible® are extending their $2,500 Down Payment and Closing Cost Assistance Grant for loans closed by December 31, 2026.
Continue reading to find out what this means for homebuyers and if you are eligible to receive these funds.
HomeReady® and Home Possible® $2,500 Down Payment and Closing Cost Assistance Grant
Also referred to as the Very Low-Income Purchase (VLIP) credit, this program is designed to make homeownership more accessible for borrowers who may have the credit scores to qualify but need an extra boost to cover upfront costs.
Whether you need help with your down payment or help covering closing costs, this $2,500 credit gives homebuyers a head start.
How It Works:
The $2,500 is applied as a lender credit at the closing table. This means the money goes directly towards your costs, reducing the amount of cash you need to bring to closing.
Best of all, this is a true grant. Unlike other down payment assistance programs, this is not a second mortgage or a lien. There is no requirement to pay this money back if you sell or refinance your home in the future.
Key Eligibility Requirements:
- First-Time Status: At least one borrower must be a first-time homebuyer.
- Income Limits: Household income must be at or below 50% of the Area Median Income Limit (AMI).
- Credit Requirements: Minimum credit score of 620 or (680 for manufactured homes).
- Minimum Contribution: A down payment of at least 3% is required. The credit must be applied as a credit towards the down payment or closing costs (which can include offsetting costs of lender-paid mortgage insurance).
- Homebuyer Education: Homeownership counseling is required before the loan can be cleared to close. Borrowers can complete this course online for free.
Additional program requirements may apply. Consult your loan officer to confirm your specific eligibility.
Available for both HomeReady® and Home Possible®, this grant allows borrowers more options for their loan. Here’s the how these two options stack up against each other.
Compare Your Options: HomeReady® vs Home Possible®
| Product | Fannie Mae HomeReady® | Freddie Mac Home Possible® |
|---|---|---|
| Great For | Borrowers with a strong rental history | Borrowers looking for property flexibility |
| Down Payment | 3% minimum requirement | 3% minimum requirement |
| Mortgage Insurance | Reduced MI rates and ability to cancel it later | Cancelable mortgage insurance (restrictions apply) |
| Property Types | Standard Residential Properties | Single-family, manufactured homes, and condominiums |
Why Choose HomeReady®
HomeReady® helps makes homeownership a reality for low-income borrowers by looking at the bigger picture of financial responsibility.
Flexible Funding: Use gifts or grants from various sources with no minimum personal contribution required.
Efficiency: Immediate appraisal orders help minimize delays so you can close with confidence.
Affordability: Lower mortgage insurance requirements keep your monthly payments more manageable.
Learn more about HomeReady®.
Why Choose Home Possible®:
Similarly, Home Possible® helps bridge the gap by offering versatile options for various housing types.
Diverse Housing: This program applies to single-family homes, manufactured housing, and renovations to condominium units.
Credit Savings: Includes credit fee caps and additional savings for qualified borrowers.
Long-Term Value: Cancelable mortgage insurance can potentially save you thousands over the life of the loan.
Learn more about Home Possible®
While both options make for great choices for homebuyers, your loan officer can help determine which option best fits your specific situation.
Make Home Happen Today
The extension of the $2,500 VLIP Grant through 2026 helps provide a massive window of opportunity for our community. Contact us today to see if you qualify for this $2,500 grant or other local assistance programs.
