Saving for a down payment can feel like one of the biggest obstacles between you and a home of your own. The good news is that you may not need to put 20% down.
The Freddie Mac HomeOne® mortgage allows qualified first-time buyers to purchase a home with as little as 3% down. It also has no borrower income limit or geographic restriction, making it worth exploring when other low-down-payment programs have rules that leave you out.
We’ll walk through how HomeOne works, who may qualify and what to consider before deciding whether it fits your goals.
In a Nutshell
Qualified first-time buyers may be able to purchase a home with a down payment as low as 3%.
At least one borrower must meet Freddie Mac’s definition of a first-time homebuyer.
There are no borrower income limits or geographic restrictions.
The home must generally be a one-unit primary residence, and the mortgage must have a fixed interest rate.
Private mortgage insurance is usually required with a 3% down payment, but it may be removed later when certain conditions are met.
How does a HomeOne® mortgage work?
HomeOne is a conventional mortgage program created by Freddie Mac. It is designed to give qualified first-time homebuyers a low-down-payment option without the income limits found in some other affordable mortgage programs.
You apply for a HomeOne mortgage through a participating lender—not directly through Freddie Mac. Your lender reviews your income, credit, debts, assets and the home you plan to buy to determine whether you qualify.
HomeOne can generally be used to purchase a single-family home, townhouse or eligible condo that will be your primary residence. It is available only as a fixed-rate mortgage.
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 Can Be Canceled
HomeOne® has no upfront mortgage insurance premiums. 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%. 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% | Income limits apply based on the property's location | 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, but there is a one-time funding fee | 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
HomeOne® keeps many of its eligibility rules fairly simple. There are no income or geographic limits, but you will need to meet Freddie Mac's guidelines for the buyer, property and loan.
First-Time Homebuyer Requirement
At least one borrower must be a first-time homebuyer. Freddie Mac generally considers you a first-time buyer if you haven't owned a home during the past three years.
Property Requirements
The home must be a one-unit property that you'll use as your primary residence. Eligible properties can include:
Single-family homes
Condos
Homes in planned unit developments (PUDs)
Certain eligible CHOICEHome® properties
Multi-unit homes, second homes and investment properties aren't eligible.
Down Payment and Loan Type
HomeOne® allows qualified buyers to put as little as 3% down. Only fixed-rate mortgages are eligible, so adjustable-rate mortgages (ARMs) aren't available through the program.
Credit and Underwriting
At least one borrower must have a usable credit score, but Freddie Mac does not set a specific minimum credit score for HomeOne® loans. Instead, the loan must receive an "Accept" decision through Freddie Mac's Loan Product Advisor (LPA). Manual underwriting isn't available.
Individual lenders can set additional credit requirements. Neighbors Bank typically requires a minimum credit score of 620.
Income and Debt
HomeOne® doesn't have an income limit, but you'll still need enough stable income to support your new mortgage payment along with your existing debts. Your lender will review your income, employment and monthly debt obligations as part of determining how much you may qualify to borrow.
Homebuyer Education
If everyone on the loan is a first-time homebuyer, at least one borrower must complete an accepted homeownership education course before closing. Freddie Mac's free CreditSmart® Homebuyer U course is one option for meeting this requirement.
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:
1. 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.
2. Prepare Documentation: Prepare income, asset, employment, and credit details.
3. Complete Education (If Required): If all borrowers are first-time homebuyers, at least one person must complete a course like Freddie Mac’s CreditSmart®.
4. Submit Application: Your lender processes your loan using Freddie Mac’s Loan Product Advisor for automated underwriting approval.
5. 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
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.