Home Possible · Licensed in NJ · CT · FL · NMLS #1630225

Home Possible — Freddie Mac’s 3% Down Loan

Home Possible needs 3% down and a 620 credit score, and your income has to sit at or below 80% of the area median where you are buying. That last part is the one that decides it, and it is a local number — the same salary can qualify in one town and not the next.

Last updated August 2026 · reviewed by a licensed mortgage broker

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★★★★★ 5.0 on GoogleNMLS #1630225 · verify on NMLS Consumer AccessLicensed in NJ · CT · FL (FL MLB 1987)Family owned since 2017 · Ridgefield, NJ

620Min Credit Score
To Qualify

3%Min Down Payment
Freddie Mac

80%Income Ceiling
Of Area Median

20%PMI Cancels
Equity, Automatic

Understanding Home Possible

Home Possible is Freddie Mac’s 3%-down program for buyers earning at or below 80% of the area median income. Below is how Home Possible works, the income limits, and who qualifies.

What Is the Home Possible Mortgage Program?

Home Possible is a conventional mortgage program created by Freddie Mac for borrowers whose income falls at or below 80% of the area median income (AMI) for the area where they are buying. It is one of the lowest down payment options outside of FHA, VA, and USDA, and because it is conventional, it comes with mortgage insurance that can eventually be canceled — something FHA generally does not allow.

What makes Home Possible different is flexibility. The 3% down payment can be a mix of your own savings, gift funds from a relative, employer assistance, or a down payment assistance program. Freddie Mac also allows non-occupying co-borrowers in some cases, so a parent can help you qualify without living in the home. You do not have to be a first-time buyer, though first-time buyers do need a short homeownership education course completed online.

Couple holding keys to their new home after qualifying for a Home Possible mortgage

A Home Possible mortgage can put homeownership within reach with as little as 3% down.

Program Requirements

Home Possible Requirements at a Glance

Before you gather documents, it helps to know what Freddie Mac looks for. These are the core Home Possible requirements for 2026.

Requirement	What It Means
Down Payment	As little as 3%, from savings, gifts, grants, or employer assistance.
Credit Score	At least 620 — higher than the FHA minimum of 500.
Income Limit	At or below 80% of the area median income (AMI) for the property’s location — a hard limit, not a guideline.
Occupancy	Primary residence only; at least one borrower must live in the property.
Property Types	1- to 4-unit homes, condos, PUDs, eligible co-ops, and manufactured homes meeting Freddie Mac’s guidelines.
Mortgage Insurance	Required below 20% equity, but reduced and cancels automatically at 20% equity — unlike FHA.
Homeownership Education	Required for first-time buyers, via CreditSmart or ReadyNest, typically a few hours online.
Existing Properties Owned	No more than two financed residential properties, including the home being purchased.
2026 Loan Limits	Standard conforming limits, roughly $832,750 to $1,249,125 for a 1-unit home depending on county; super conforming loans excluded.
Refinance Option	Purchase or no-cash-out refinance only; cash-out refinances are not eligible.

Income Limits by Location

Does Your Income Qualify? It Depends on Where You Buy

Home Possible income limits are set county by county based on 80% of the area median income. Here is what that looks like for buyers we work with across NJ, CT, and FL.

Bergen, Hudson & Passaic Counties, NJ. These counties have higher area median incomes than the state average, so the Home Possible income ceiling is also higher here. A household over the limit in a rural county may still qualify here. We check the exact figure for your town before you apply.

Fairfield & New Haven Counties, CT. Connecticut’s income limits vary significantly by town. A buyer just over the limit in one town may be comfortably under it a few miles away — usually answered with a single lookup.

Florida Buyers Outside Major Metros. Many areas outside Miami-Dade, Broward, and Orlando have area median incomes that make Home Possible limits more generous relative to local home prices — one of the most affordable paths to homeownership we offer there.

2-to-4 Unit Properties. Buying a duplex, triplex, or fourplex and living in one unit? Rental income from the other units may help you qualify, though credit score and reserve requirements run higher under Home Possible.

Our Process

How We Help You Qualify for Home Possible

Home Possible has more moving parts than a standard conventional loan — income limits, property eligibility, and credit thresholds all have to line up. Here is how we make sure they do.

Free Eligibility Review

We start with a conversation about your income, the towns you are considering, and your credit profile, then run the Home Possible income limit for that area and tell you, on that first call, whether you are likely to qualify.

Credit, Income & Property Match

We pull your tri-merge credit report, review your documented income the way an underwriter will, and confirm the area median income limit and property eligibility for your exact address — including manufactured homes and multi-unit properties.

Real Pre-Approval

Our pre-approvals reflect an actual review of your file, not just a credit pull. When you make an offer with our pre-approval letter, sellers and agents know the file has already been looked at by a person.

Through Closing & Beyond

From accepted offer to closing day, we manage the file and coordinate with your agent. Afterward, we keep an eye on when your mortgage insurance can be removed once you hit 20% equity.

Not sure whether your income is under the limit?
It is set by town — we look yours up

Before You Start

What Happens After You Apply

You send the application
A few minutes online. No documents at this stage.
A licensed loan officer calls you
Someone on our team covering your state.
We ask for documents and pull credit
Only once you have decided to move forward.
You get an approval to shop with
Typically back within the hour.

What Clients Say

Real Reviews From Our Clients

Here’s what a few of our clients said about working with Mortgage-World.com.

★★★★★

“Chris Luis is the BEST mortgage broker on this planet! If you’re looking to buy a home, definitely give him a call. Chris will go above and beyond to try to help you!”

— Tanya W.

★★★★★

“I had an opportunity to work with Chris when I did my refinancing. I would highly recommend his services to anyone. He was efficient, helpful and very prompt in responding.”

— Aurora T.

★★★★★

“Julia Luis has been very professional and has been very helpful during the process! Anyone looking for someone to assist them in their future adventures needs to have her on your side! Thank you for being there for me!!”

— Joel F.

Home Possible — Frequently Asked Questions

What credit score do I need for Home Possible?

The Home Possible minimum is 620. That is higher than the FHA minimum of 500, so if your score is below 620, FHA is worth a look. Send us your numbers and we will tell you which one your file fits.

What is the income limit for Home Possible?

Generally 80% of the area median income (AMI) for the county where the property is located. It is not a single nationwide number — it changes county to county and even town to town. A household earning $90,000 might qualify in one area and exceed the limit in another.

How much down payment do I need for Home Possible?

As little as 3% of the purchase price — on a $300,000 home, that is $9,000 instead of $60,000 for 20% down. The 3% can come from savings, a gift, an employer assistance program, or a down payment assistance grant.

Can I use gift money for my down payment with Home Possible?

Yes. Home Possible allows the down payment to come from gift funds, grants, or employer assistance, in addition to your own savings — one of the program’s biggest advantages for buyers with steady income who have not saved a lump sum.

Does Home Possible require mortgage insurance forever?

No. Mortgage insurance on Home Possible is reduced and cancels once you reach 20% equity, whether through paydown or appreciation — a meaningful difference from FHA, where it often lasts the life of the loan.

Is Home Possible only for first-time home buyers?

No, but first-time buyers do have one extra step: a homeownership education course, available online through CreditSmart or ReadyNest in a few hours. Repeat buyers can use Home Possible as long as guidelines are met.

What counts as income for the 80% limit?

The income used to qualify you, from everyone going on the loan. Not household income in the census sense — a working adult in the house who is not on the mortgage does not count against you. This trips people up more than any other part of the program.

What if I am just over the income limit?

You move to an ordinary conventional loan. It is still 3% down for a first-time buyer and still a 620 score; you lose Home Possible’s reduced mortgage insurance, not the low down payment. Worth pricing both, because the gap is usually smaller than people expect.

Can I use Home Possible on a two-to-four unit property?

Yes, if you live in one of the units. The down payment and the income ceiling work the same way, and rent from the other units can help you qualify. You cannot use it on a property you will not occupy.

How is Home Possible different from HomeReady?

Freddie Mac runs Home Possible and Fannie Mae runs HomeReady. Both are 3% down, both need a 620 score, and both cap income at 80% of the area median. Which one you end up in is usually decided by which agency your file gets a cleaner automated approval from, not by you.

Related conventional pages: Conventional loans overview · HomeReady · 3% down payment.

Related Resources

Which Low-Down-Payment Route Fits You?

Home PossibleFreddie Mac, 3% down, income at or below 80% AMIYou are here HomeReadyFannie Mae’s version of the same ideaCompare Conventional loanNo income ceiling, 3% or 5% downCompare FHA loanLower score, no income limit at allCompare

Related Conventional ProgramsDown payment help 3% down explained

Mortgage-World.com

Licensed mortgage broker · NMLS #1630225

Start with three questions

No credit pull, no documents yet.

What are you doing?Which state?Credit score, roughlySee what I qualify for

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Call 888.958.5382

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★★★★★Google reviews

Licensed in: NJ · CT · FL
Broker license: NMLS #1630225
Florida license: MLB 1987
Family owned since: 2017
Office: Ridgefield, NJ

Find out whether Home Possible fits your income

Send the town you are buying in and roughly what the household earns. A licensed loan officer will look up that area’s median income, tell you where you sit against the 80% line, and price Home Possible against the ordinary 3% down conventional loan if you are over it.

What You Need

✓620 minimum credit score

✓3% down payment

✓Income at or below 80% of area median

Apply Online — Free Call 888.958.5382

No obligation · about 5 minutes

Written and reviewed by Chris Luis, Broker/Owner of Mortgage-World.com, NMLS #1630225. About the author

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