A HomeOne® mortgage is a type of conventional loan created by Freddie Mac, a government-sponsored enterprise (GSE) that helps keep mortgage funding stable and affordable.
Designed for first-time buyers, this program especially helps those lacking the savings for a large down payment. It combines low upfront costs with flexible eligibility, making it a strong option for buyers who might not qualify for other programs.
In a Nutshell
In 2025, HomeOne® mortgages are one of the most accessible paths to buying a first home. Here are their key requirements:
Minimum Down Payment: 3%
Minimum Credit Score: Typically 620+, but varies depending on the lender
Buyer Status: At least one borrower must be a first-time homebuyer
Income Requirements: Borrowers have sufficient income to cover the new mortgage payment and debts
Income Limits: None
Loan Restrictions: Fixed-rate purchase and refinance loans only
HomeOne® Mortgage Benefits
The HomeOne® Mortgage provides several clear benefits that make it stand out among today’s low down payment loan options, especially for first-time buyers who need both flexibility and accessibility.
3% Minimum Down Payment
The 3% minimum down payment is one of the loan’s most attractive features. On a $250,000 home, that equals $7,500. Compare that to the $50,000 required for a traditional 20% down payment. For many families, this is the difference between buying now and waiting for years.
No Income or Geographic Restrictions
HomeOne® mortgages also do not have income limits or location eligibility standards, unlike USDA loans (a 0% down payment loan program for eligible rural homebuyers), which have both. A teacher in a small town and a nurse in a large metro area both have the same opportunity to qualify, making the program more inclusive and adaptable to different financial situations.
Mortgage Insurance That Works in Your Favor
HomeOne® has no upfront mortgage insurance premiums or loan fees. In comparison, FHA loans, which also have a low down payment requirement (3.5%), require an upfront fee and an annual mortgage insurance premium (MIP).
With HomeOne® loans, borrowers pay private mortgage insurance (PMI). The important distinction is that PMI can be canceled once the loan-to-value ratio reaches 80% percent. Over time, this helps reduce monthly costs as you build equity.
Higher Financing Flexibility
Borrowers can finance up to 97% of the home’s value with a HomeOne® Mortgage. In some cases, total financing can even reach 105% total loan-to-value (TLTV) when paired with Affordable Seconds® secondary financing.
In simple terms, TLTV adds together the primary mortgage and any approved secondary financing, like down payment assistance or a forgivable community loan, which makes it possible to borrow slightly more than the home’s price to help cover upfront costs.
Example: Imagine a $200,000 home. With HomeOne®, a buyer could get a primary mortgage for $194,000 (97%). If they also receive $10,000 in secondary financing through an Affordable Seconds® program, their total financing becomes $204,000 — or 102% TLTV. That extra coverage can help offset your down payment and closing costs, reducing the cash you need to bring to the table.
HomeOne® vs. Other Low Down Payment Mortgages
When weighing your options, comparing the HomeOne® Mortgage to other home loan programs is natural. Each has advantages, but the differences matter when deciding which fits your needs.
| Loan Program | Minimum Down Payment | Income/Location Restrictions | Mortgage Insurance | Who Qualifies |
|---|---|---|---|---|
| HomeOne® Loan | 3% | None | PMI (cancellable once 80% LTV is reached) | At least one first-time buyer; primary residence |
| HomePossible® & HomeReady® Loans | 3% | Yes – income and geographic restrictions | PMI (cancellable) | Low- to moderate-income borrowers; primary residence |
| FHA Loan | 3.5% | None | Upfront MIP + monthly premiums (lasts for life of loan if <10% down) | Broad eligibility; primary residence |
| VA Loan | 0% | None | No mortgage insurance | Veterans, active-duty service members, and eligible surviving spouses; primary residence |
| USDA Loan | 0% | Yes – income restrictions and geographically restricted to eligible rural and suburban areas | Upfront guarantee fee + annual fee | Borrowers purchasing in USDA-eligible locations; primary residence |
HomeOne® Mortgage Eligibility Requirements
If you meet the following requirements, you are likely eligible for a HomeOne® Mortgage:
First-Time Homebuyer Requirement: At least one borrower must be a first-time homebuyer, meaning they have not owned a home in the past three years.
Borrower Type: Eligible borrowers include recent graduates, newly married couples, families transitioning from renting, or previous homeowners who have been out of the market for at least three years.
- Property Eligibility:
Must be a 1-unit primary residence (single-family home, condo, or home in a planned unit development).
Multi-unit or investment properties are not eligible.
Loan Structure: Only fixed-rate mortgages qualify. Adjustable-rate mortgages (ARMs) are not permitted.
Credit Score: At least one borrower must have a usable credit score. A minimum score of 620 is typically required, though this can vary by lender.
Neighbors Bank typically requires a credit score of 620.
Underwriting: The loan must receive an “Accept” decision through Freddie Mac’s Loan Product Advisor automated system. Manual underwriting is not allowed.
Homeownership Education: If all borrowers are first-time buyers, at least one must complete an accepted homeownership education course, such as Freddie Mac’s free CreditSmart® program.
Income Rules: No income limits exist, but borrowers must demonstrate sufficient, stable income to cover the new mortgage payment and existing debts.
How to Get a HomeOne® Mortgage
Applying for the HomeOne® program is a familiar process with a few unique steps. Here’s how it works when you apply with Neighbors Bank:
Check Your Eligibility: Fill out some basic information online, and a loan expert will contact you to confirm your HomeOne® eligibility and available loan size.
Prepare Documentation: Prepare income, asset, employment, and credit details.
Complete Education (If Required): If all borrowers are first-time homebuyers, at least one person must complete a course like Freddie Mac’s CreditSmart®.
Submit Application: Your lender processes your loan using Freddie Mac’s Loan Product Advisor for automated underwriting approval.
Close and Track PMI: Once approved, you close on the home. From there, you can monitor your equity to remove PMI eventually.
HomeOne® Mortgage Frequently Asked Questions
What is the minimum down payment required for a HomeOne® mortgage?
The minimum down payment for a HomeOne® Mortgage is 3%. This low requirement makes it one of the most accessible and practical first-time homebuyer mortgage options available, allowing qualified borrowers to enter the market with less upfront savings while still benefiting from a conventional loan structure.
How does Freddie Mac define “first-time buyer?”
A first-time buyer is technically considered someone who has not owned a home in the last three years.
What are the mortgage insurance requirements?
You need PMI, but it can be canceled once your loan-to-value ratio falls to 80%. This is an advantage compared to FHA loans, where mortgage insurance remains for the life of the loan unless you provide a 10%+ down payment at closing.
Can I use a HomeOne® loan to refinance?
Yes, you can use a HomeOne® loan for a rate and term refinance. However, cash-out refinances are not allowed under this program.
Next Steps
The Freddie Mac HomeOne® Mortgage provides an accessible way for more people to enter the housing market. With its low 3% down payment, cancellable PMI, and lack of income or geographic restrictions, it gives first-time buyers more flexibility than many competing programs.
For some borrowers, it could be the key to making ownership possible.
Ready to move forward? Get started online to check your eligibility, and a Neighbors Bank loan expert will be in touch to see if the Freddie Mac HomeOne® program could help you step into a home of your own.
Note: HomeOne® is a registered trademark of Freddie Mac.
Emily Kittle is an experienced underwriter with a strong background in risk assessment, training, and loan decision-making. She excels at solving complex mortgage challenges and guiding loans to closing using creativity and critical thinking.
