Quick answer
Home Possible is Freddie Mac’s conventional mortgage for low- and moderate-income borrowers: total qualifying income can’t exceed 80% of the area median income, and a fixed-rate loan on a one-unit home can reach 97% loan-to-value — a 3% down payment. It is for primary residences only.
Key facts
Where the down payment can come from
Freddie Mac accepts gifts, grants, cash on hand, employer housing assistance and, in some cases, sweat equity. An Affordable Second — a second loan from an eligible source such as a housing agency — can push the total loan-to-value up to 105%, which can cover closing costs as well as the down payment. If all occupying borrowers are first-time homebuyers, at least one must complete homeownership education before closing.
A $280,000 home
At 97% LTV the first mortgage is $271,600 and the down payment $8,400. Within the 105% total cap, an Affordable Second could add up to $22,400.
Home Possible vs HomeReady
HomeReady is Fannie Mae’s counterpart, with the same 80% income cap; a lender that sells loans to both companies can quote you either. Both carry private mortgage insurance below 20% down. See the first-time buyer programs guide.
Related terms
Sources
- Freddie Mac Home Possible fact sheet — Freddie Mac Home Possible maximum LTV, one-unit fixed-rate loan; Freddie Mac Home Possible maximum TLTV with Affordable Seconds; Freddie Mac Home Possible income limit (share of area median income) (Feb 1, 2026)
- Fannie Mae Selling Guide B5-6-01 — Fannie Mae HomeReady income limit (share of area median income) (Jun 4, 2025)
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.