Freddie Mac announces $2,500 credit for down payment assistance for very low-income families



    Borrowers going through Freddie Mac’s Home Possible or HFA Advantage program qualify for assistance.  (iStock)

    Prospective homebuyers who earn 50% of their area median income or less are now eligible for a $2,500 credit they can put toward a down payment or other closing costs, Freddie Mac recently announced.

    The credit is available to buyers using Freddie Mac’s Home Possible mortgage product or the HFA Advantage program. Both these programs are designed for very low-income borrowers and have low down payment requirements.

    “Today’s announcement is a vital lifeline for would-be homeowners, as studies show that down payment and closing costs are among the largest barriers to homeownership for very low-income homebuyers,” said Sonu Mittal, SVP and head of Single-Family Acquisitions at Freddie Mac.

    “Our commitment to supporting these families runs deep, as we have provided assistance to this population through various programs since 2018. We are pleased to now make this assistance more broadly available to borrowers through our Home Possible program.”

    The $2,500 can be used for down payment costs but can also go towards escrow and mortgage insurance premiums, as well as most other closing costs buyers face.

    As mortgage rates trend down this year, you may find you’re finally ready to buy a home. If you think you’re ready to shop around for a home loan, consider using Credible to help you easily compare interest rates from multiple lenders at once.


    States take local action to help prospective homebuyers

    Some states have released new down payment assistance programs to help combat the housing crisis and encourage lower-income buyers to pursue homeownership.

    California is revamping the Dream for All program that offers up to 20% for down payments, up to $150,000. In 2023, buyers used the $300 million in assistance in just 11 days.

    California plans to offer $250 million more in spring 2024 in an attempt to reach a more diverse pool of borrowers. The program will provide the same assistance – up to 20% of the purchase price of the home, not exceeding $150,000. When the home the buyer purchased sells in the future, the loan gets paid back plus a share of the home’s appreciation.

    Minnesota also set aside $170 million to support first-generation homebuyers. Over the next three years, 5,000 homebuyers can apply for down payment assistance.

    The program aims to help mostly Black, Indigenous and people of color since the state has a large homeownership gap within these groups. The program is set to start in the spring.

    When you’re ready to start shopping around for the right mortgage lender, Credible can let you view multiple mortgage lenders and provide you with personalized rates without impacting your credit.


    Monthly payments are going down for homeowners

    Across the country, monthly mortgage payments are slowly trending down. In December 2023, the average mortgage payment was $2,361, according to a Redfin report. This average is $372 less than October 2023’s all-time high.

    Monthly payments have gone down for a number of reasons. Interest rates are dropping and listings are up by 10% year over year, Redfin data shows. This leads to less competition and fewer bidding wars. 

    “There have been more tours and more offers on my listings since mortgage rates started declining,” said Shay Stein, Las Vegas Redfin Premier agent. “It’s all about perspective: Two years ago, buyers would have cried about a 6% mortgage rate. Now, they’re happy they’ve dropped down to the mid-6’s.”

    While the housing market is far from affordable for many prospective buyers, buying is becoming slightly more manageable for certain buyers.

    The share of income necessary to buy a average-priced home fell by about 5% since October of last year, reported the ICE Mortgage Monitor Report.

    “In recent months, we’ve seen improvement in rates, affordability, and for sale inventory, with monthly home price growth moderating on a seasonally adjusted basis,” said Andy Walden, ICE vice president of enterprise research strategy.

    “While we are still out of sync with historical norms on multiple fronts, each of those metrics have at least been moving in the right direction,” Walden said.

    If you’re looking to purchase a home in today’s market, you can explore your mortgage options by visiting Credible to compare rates and lenders and get a mortgage preapproval letter in minutes.


    Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at and your question might be answered by Credible in our Money Expert column.

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