Buying a Home? 3% Down Payments Start Next Week

Freddie Mac will begin offering mortgages with down payments of only 3 percent — the first time they’ve been this low on the GSE’s loans in nearly five years — starting March 23. The move is expected to make more credit available to entry-level borrowers.

“By launching our 3 percent down payment mortgage now, at the start of the spring homebuying season, lenders will be ready to serve qualified working families who are ready to buy and keep the recovery going,” Dave Lowman, executive vice president for Freddie Mac’s single-family business, writes on its Executive Perspectives blog.

Besides 3 percent down payments, Freddie Mac’s Our Home Possible Advantage Program, which is aimed at supporting first-time buyers as well as low- and moderate-income borrowers, is allowing no minimum from borrowers in contributions. That means parents or relatives now can cover 100 percent of the down payment through gifts.

Source: “Advantage: Home Buyers,” Freddie Mac (March 9, 2015)