Freddie Mac’s $2,500 Housing Credit: A Game-Changer for Low-Income Homebuyers

Written by: Courtney Muller
  |  3 min read
Freddie Mac's $2,500 low-income housing credit assists homebuyers with down payments or closing costs on Home Possible or HFA Advantage mortgages

Key Takeaways

    • Freddie Mac’s $2,500 housing credit helps low-income buyers reduce upfront homebuying costs.

    • The Home Possible® mortgage offers flexible credit guidelines and a low 3% down payment, making homeownership more accessible.

    • Only borrowers earning 50% or less of AMI and using eligible loan programs can receive the credit.

    • The credit is available through February 28, 2025, making now a key time for qualifying buyers to act.

Freddie Mac has launched a $2,500 housing credit to assist homebuyers earning 50% or less of their area median income (AMI). This credit can be used toward down payments or closing costs for buyers utilizing the Home Possible® mortgage or HFA Advantage® program—two mortgage products designed for low-income borrowers with minimal down payment requirements. Available from March 1, 2024, through February 28, 2025, this initiative aims to make homeownership more accessible.

Freddie Mac’s Commitment to Affordable Housing

High down payments and closing costs remain major obstacles for low-income homebuyers. Sonu Mittal, SVP and head of Single-Family Acquisitions at Freddie Mac, emphasized the organization’s commitment to easing these financial burdens. Since 2018, Freddie Mac has introduced various programs to support homeownership, with the latest initiative expanding assistance through the Home Possible® program.

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Home Possible®: Expanding Access to Homeownership

The $2,500 housing credit provides flexibility by covering expenses such as:

With mortgage rates declining, potential homebuyers may find now a favorable time to enter the market. The Home Possible® mortgage offers flexible credit guidelines and low down payment options, making homeownership more achievable for low-to-very-low-income borrowers. This program requires a minimum 3% down payment and provides expanded financing solutions to support first-time buyers.

How Freddie Mac’s Mortgage Programs Work

Freddie Mac buys mortgages from private lenders and converts them into mortgage-backed securities, increasing liquidity in the housing market. Among its specialized loan products, Home Possible® mortgages are exclusively available through private lenders.

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Key eligibility requirements for the $2,500 homebuyer credit:

  • Must secure a conventional mortgage through a private lender
  • FHA loans and other government-backed mortgages do not qualify
  • Loans from local housing finance agencies (HFAs) may be eligible through the HFA Advantage® mortgage

Who Qualifies for the $2,500 Housing Credit?

Borrowers who meet the program’s criteria will receive the $2,500 credit directly from their lender, with Freddie Mac reimbursing the lender upon loan sale. This credit helps bridge the affordability gap, allowing more buyers to secure a home with minimal upfront costs.

To qualify for Home Possible®, borrowers must meet the following criteria:

Requirement Details
Minimum Down Payment 3%
Credit Score 660+
Homebuyer Education Required for first-time buyers
Income Limit 50% or less of AMI

Local housing finance agencies can help buyers find lenders offering Home Possible® and HFA Advantage® mortgages.

Bottom Line

Freddie Mac’s $2,500 housing credit offers critical financial relief for low-income homebuyers struggling with upfront costs. By combining this credit with Home Possible®’s low down payment options, first-time buyers can take a major step toward homeownership.

If you’re looking to buy a home and meet the eligibility criteria, explore your mortgage options today to take advantage of this limited-time opportunity.

FAQs: Freddie Mac’s $2,500 Housing Credit

Homebuyers earning 50% or less of their area median income (AMI) and using a Home Possible® or HFA Advantage® mortgage may qualify.
The credit can go toward down payments, closing costs, escrow fees, or mortgage insurance premiums to reduce upfront expenses.
The program runs from March 1, 2024, through February 28, 2025, giving eligible buyers a limited-time opportunity.
No, the credit is only available for conventional loans through private lenders, not government-backed loans like FHA.
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