Freddie Mac Single-Family Seller/Servicer Guide 4501.4 — Eligible Borrowers for Home Possible® Mortgages

Freddie Mac Single-Family Seller/Servicer Guide 4501.4 — Eligible Borrowers for Home Possible® Mortgages

Effective 2026-08-05 · Freddie Mac's stamp for this section

Refer to Bulletin 2026-10, which announced updates related to accumulated assets as income. Sellers may implement the new requirements prior to the mandatory February 3, 2027 version of this section. This section contains requirements related to: ■ Income limits ■ Occupancy ■ Ownership of other property (a) Income limits The Borrower’s qualifying income, converted to an annual basis, must not exceed 80% of the Area Median Income for the location of the Mortgaged Premises. To determine whether the Borrower’s income exceeds the income limits, the Seller must rely on the income used to qualify the Borrower. ■ For Loan Product Advisor® Mortgages, Loan Product Advisor will determine the income eligibility of the Mortgage ■ For Non-Loan Product Advisor Mortgages, the Seller must use the Home Possible® Income & Property Eligibility tool. The Seller may not use other published Area Median Income versions (such as those posted on https://www.huduser.gov/portal/home.html) to determine Mortgage or product eligibility. (b) Occupancy (i) Occupancy requirement At least one Borrower must occupy the property secured by a Home Possible Mortgage as their Primary Residence. (ii) Requirements for Mortgages with non-occupying Borrowers Non-occupying Borrowers are permitted, provided that: ■ The Mortgage is secured by a 1-unit property ■ The loan-to-value (LTV), total LTV (TLTV), and Home Equity Line of Credit (HELOC) TLTV ratios must not exceed: ❑ 95% for Loan Product Advisor Accept Mortgages, except that for fixed-rate Mortgages with Affordable Seconds®, the TLTV ratio must not exceed 105% ❑ 90% for Manually Underwritten Mortgages, except that for fixed-rate Mortgages with Affordable Seconds, the TLTV ratio must not exceed 105% ■ For Manually Underwritten Mortgages, the occupant Borrower’s: ❑ Monthly housing expense-to-income ratio should not exceed 35%; and ❑ Monthly debt payment-to-income (DTI) ratio must not exceed 43% Note: Funds used to qualify for the Mortgage may come from the occupying and/or the non-occupying Borrower. (c) Ownership of other property The occupying Borrower(s) must not have an ownership interest in more than two financed residential properties, including the subject property, as of the Note Date, or the Effective Date of Permanent Financing for Construction to Permanent Mortgages and Renovation Mortgages.

Source: Freddie Mac Single-Family Seller/Servicer Guide 4501.4 — Eligible Borrowers for Home Possible® Mortgages · source URL · snapshot 4c94f67729042dd6

Freddie Mac Single-Family Seller/Servicer Guide 4501.4 — Eligible Borrowers for Home Possible® Mortgages — PENDING VERSION, takes effect 2027-02-03

Not yet in force. This is the pending version of the section, which takes effect 2027-02-03. The other version on this page governs until then.

Effective 2027-02-03 · Freddie Mac's stamp for this section

This section contains requirements related to: ■ Income limits ■ Occupancy ■ Ownership of other property (a) Income limits The Borrower’s qualifying income, including using accumulated assets as income described in Section 5307.1, converted to an annual basis, must not exceed 80% of the Area Median Income for the location of the Mortgaged Premises. To determine whether the Borrower’s income exceeds the income limits, the Seller must rely on the income used to qualify the Borrower. ■ For Loan Product Advisor® Mortgages, Loan Product Advisor will determine the income eligibility of the Mortgage ■ For Non-Loan Product Advisor Mortgages, the Seller must use the Home Possible® Income & Property Eligibility tool. The Seller may not use other published Area Median Income versions (such as those posted on https://www.huduser.gov/portal/home.html) to determine Mortgage or product eligibility. (b) Occupancy (i) Occupancy requirement At least one Borrower must occupy the property secured by a Home Possible Mortgage as their Primary Residence. (ii) Requirements for Mortgages with non-occupying Borrowers Non-occupying Borrowers are permitted, provided that: ■ The Mortgage is secured by a 1-unit property ■ The loan-to-value (LTV), total LTV (TLTV), and Home Equity Line of Credit (HELOC) TLTV ratios must not exceed: ❑ 95% for Loan Product Advisor Accept Mortgages, except that for fixed-rate Mortgages with Affordable Seconds®, the TLTV ratio must not exceed 105% ❑ 90% for Manually Underwritten Mortgages, except that for fixed-rate Mortgages with Affordable Seconds, the TLTV ratio must not exceed 105% ■ For Manually Underwritten Mortgages, the occupant Borrower’s: ❑ Monthly housing expense-to-income ratio should not exceed 35%; and ❑ Monthly debt payment-to-income (DTI) ratio must not exceed 43% Note: Funds used to qualify for the Mortgage may come from the occupying and/or the non-occupying Borrower. (c) Ownership of other property The occupying Borrower(s) must not have an ownership interest in more than two financed residential properties, including the subject property, as of the Note Date, or the Effective Date of Permanent Financing for Construction to Permanent Mortgages and Renovation Mortgages.

Source: Freddie Mac Single-Family Seller/Servicer Guide 4501.4 — Eligible Borrowers for Home Possible® Mortgages · source URL · snapshot 4c94f67729042dd6