Looking to buy a new home but struggling with down payment or closing costs? You're not alone. Luckily, there's a solution: Freddie Mac BorrowSmart®.
So, What is BorrowSmart?
This program is designed for low- to moderate-income borrowers and offers up to $1,500 in down payment and/or closing cost assistance, based on eligibility criteria. The best part is that the funds homebuyers receive from BorrowSmart are not in the form of a loan, so you won't have to worry about paying it back. (It’s not too good to be true!) If you qualify for a Freddie Mac Home Possible® or Freddie Mac HomeOne® mortgage and have enough cash for a 3% down payment, you could be eligible for assistance.
More Benefits of BorrowSmart
BorrowSmart is a flexible program that allows you to combine it with other eligible sources such as gift funds from family or non-profits, employer-assisted homeownership programs, and Affordable Seconds®. This means that you can use a variety of sources to help you reach your minimum down payment, your closing costs, or both, and not necessarily need to fund all of these upfront costs with money from your savings.
Who Qualifies for BorrowSmart?
To qualify for BorrowSmart, homebuyers need a minimum credit score starting at 580 and to complete homebuyer counseling, which will help prepare them for long-term homeownership. The counseling fee is typically $99.
It’s also important to note that this program only applies to primary residences (not second homes, vacation homes, etc.) and income determines the level of assistance a homebuyer may receive.
This program is only for primary residences. Condos, planned unit development (PUDs), and manufactured homes may be eligible.
How Much Cash Can I Receive?
Depending on income and other factors, you may be eligible for BorrowSmart, and here’s a breakdown of cash homebuyers may be able to put toward their home purchase:
- Borrowers with qualifying income less than or equal to 50% of county area median income (AMI) may qualify for $1,500.
- Borrowers with qualifying income between 50.01% and 80% of county AMI may qualify for $1,000.
- Borrowers with qualifying income between 80.01% and 100% of county AMI may qualify for $500 if their property is in a high-needs area with designated rural tracts.
BorrowSmart Eligibility Highlights:
- Minimum credit score starting at 580
- Primary residences only
- Homebuyer counseling required
- Available in all 50 states
- Low- and moderate income requirements
Eligible Property Types:
- 1-unit single family homes*
- Condos
- Planned unit developments
- Manufactured homes (not eligible for HomeOne®)
What’s Next?
BorrowSmart makes buying a home that much easier! If you or other homebuyers you know are struggling to come up with the cash needed for some of the major upfront costs of buying a home, including the down payment or closing costs, this program may be the best option. We’re ready to walk you through everything you need to know about BorrowSmart or any of our other flexible home loan programs. We’re here to put more homebuyers in homes by offering mortgage options that make sense for them, their finances, their family, and their future.
Closing the Gap Between Homeownership and Underserved Communities
We are not only a mortgage lender and servicer; we are agents of change. The Newrez Family of Companies is committed to making a meaningful impact, fostering inclusivity, and empowering individuals and communities to thrive through the power of homeownership. And we know that putting homeownership at the forefront of our underserved communities starts with expanding our loan programs to include mortgage options that give these borrowers access to home buying opportunities. The ultimate goal? Make homeownership accessible to all, regardless of income or background.
The Bottom Line
Getting approved for a mortgage doesn’t always have to feel out of reach. The more mortgage options homebuyers have access to, the more homebuyers can be transformed into homeowners. So, don't let a lack of funds hold you back from owning your dream home. Take advantage of the BorrowSmart program!
Disclaimers
*HomeOne® must be secured by 1-unit properties that are not Manufactured Homes.
Down payment assistance products may have a higher interest rate or higher finance charges than other loan products which may be available.
Freddie Mac®, Home Possible®, HomeOne®, Affordable Seconds® and Freddie Mac BorrowSmart® are registered trademarks of the Federal Home Loan Mortgage Corporation. The previously mentioned companies and programs are not affiliated with the Company.
This is not a commitment to lend or the guarantee of a specified interest rate. All loan programs and availability of cash proceeds are subject to credit, underwriting, and property approval. Programs, rates, terms and conditions are subject to change without notice. Other restrictions apply.