What are the Home Possible income limits? Freddie Mac’s Seller/Servicer Guide says the borrower’s qualifying income, converted to an annual basis, may not exceed 80% of the area median income (AMI) for the location of the property.
That’s a percentage, not a dollar amount. The figure behind it depends on where the home is, so there’s no single number to memorize. Freddie Mac points lenders to its own eligibility tool to find it.
So the practical question for a buyer is narrower than it sounds. Does the income used to qualify fall under the figure for that home’s location? A loan officer can check that for your file. Bring the income and the address.
What Is Home Possible?
Home Possible is a mortgage from Freddie Mac. Freddie Mac’s Seller/Servicer Guide on Home Possible eligibility has a section on which borrowers are eligible for these mortgages, covering income limits, occupancy and ownership of other property. The guide is written for lenders, so it’s general information, not an offer.
Freddie Mac’s eligibility tool page calls that tool “intended to help provide guidance as to qualifications for Home Possible”. The page adds that final eligibility is determined within Loan Product Advisor or through approved manual underwriting.
None of that settles an individual file. A loan officer can say how the program applies to a specific loan.
What Are the Home Possible Income Limits?
Freddie Mac’s guide compares a borrower’s qualifying income, on an annual basis, with the area median income for the location of the property. It may not exceed 80% of that figure. So the limit moves with the location of the home, not with the buyer’s hometown.
The guide puts it in its own terms: 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.”
AMI stands for area median income. That’s Freddie Mac’s own term for it. The dollar figure for a given home has to be looked up. Freddie Mac publishes a tool for that.
A buyer weighing help with the down payment can also read about stacking down payment assistance with your mortgage.
Whose Income Is Compared With the Limit?
Freddie Mac’s guide has the lender compare the income used to qualify the borrower. So the number that matters is the one the lender uses to qualify the loan.
The guide says the lender “must rely on the income used to qualify the Borrower.” That’s the guide’s rule for deciding whether income is over the limit.
That part isn’t something to guess at. A loan officer can say how income would be figured for a specific loan.
Where Do You Find the Home Possible Income Limit for Your Area?
The figure depends on the property’s location. Freddie Mac’s Home Possible Income and Property Eligibility Tool page describes a tool that checks whether a borrower can qualify based on the property location and the borrower’s qualifying income. The page is written for lenders, like the guide.
The page advises that for best results you “enter the complete property street address.” The result shows a FIPS code, which the page says uniquely identifies the census tract.
The tool page defines the Home Possible income limit result as “the maximum borrower income allowed to qualify for Home Possible.” That’s for the specific census tract.
The guide also says which figures count. For mortgages run through Freddie Mac’s Loan Product Advisor, that system determines the income eligibility of the mortgage. Otherwise the lender must use the eligibility tool. The guide adds that the lender “may not use other published Area Median Income versions”, so a figure you find in an unofficial table is worth confirming with a loan officer.
What Do Very Low Income and Low Income Loans Mean?
Freddie Mac’s tool page uses two labels for income measured against the county area median income. A Very Low Income Loan is the label for qualifying income at or under 50% of it. A Low Income Loan covers income above 50% and up to 80%. The page words both as something a borrower may qualify for, not a promise.
The tool page says “Borrowers whose qualifying income is less than or equal to 50% of county area median income may qualify for a Very Low Income Loan.”
Above that band, the page says qualifying income greater than 50% and up to and including 80% of county area median income may qualify for a Low Income Loan. A loan officer can say which label, if any, fits a specific loan.
Do You Have to Live in the Home?
Freddie Mac’s guide says at least one borrower must occupy the property as a primary residence. So under that rule, Home Possible is for a home you plan to live in. It isn’t for a property bought only to rent out. Occupancy sits in the same guide section as the income limit.
The guide’s own wording: “At least one Borrower must occupy the property secured by a Home Possible Mortgage as their Primary Residence.”
Who counts as that borrower is a question for your file. A loan officer can say how the occupancy rule applies to the people on a specific loan.
Is Home Possible a Freddie Mac or a Fannie Mae Program?
Home Possible is a Freddie Mac program. The guide section that sets the income limit is Freddie Mac’s, and so is the eligibility tool page that describes the lookup. If you’re searching for the limit, keep the program name and the source together.
Fannie Mae offers a separate program, HomeReady, with its own income limit. Readers comparing the two can see how Fannie Mae’s HomeReady income limit works.
Where Your Own Income Fits In
The limit compares income with the figure for the home’s location. So whether a household lands under it depends on two things: the income used to qualify, and where the home is. Bring both to a conversation with a loan officer instead of guessing from a number you found elsewhere.
Fellowship’s mortgage process page describes what its team looks at: “We holistically assess income, debt-to-income ratio, credit score, employment trajectory, and property type to determine eligibility.” It adds: “Each loan program has different sets of eligibility guidelines.”
Fellowship’s home purchase page puts it this way: “Depending on your circumstances, one home loan may be better than another.” That’s why a question about your own income and a program’s limit is worth talking through with a loan officer.
Frequently Asked Questions About Home Possible Income Limits
What is the Home Possible income limit?
Freddie Mac’s Seller/Servicer Guide says the borrower’s qualifying income, converted to an annual basis, may not exceed 80% of the area median income for the location of the property. It’s a percentage, not a fixed dollar amount, so the figure behind it changes with where the home sits.
Does Home Possible have income limits?
Yes. Freddie Mac’s guide compares the borrower’s income with the area median income for the location of the property. The ceiling is 80% of that figure, on an annual basis. A loan officer can say how that comparison works for your loan.
What are the Home Possible income limits for my area?
The figure depends on the property’s location. Freddie Mac’s eligibility tool page describes a tool that takes a property address and returns the limit for that census tract. The guide has lenders use Loan Product Advisor or that tool rather than other published area median income versions. Ask your loan officer which figure applies.
Whose income does the lender compare with the limit?
Freddie Mac’s guide says the lender relies on the income used to qualify the borrower. That’s the figure compared with the limit. So it’s the qualifying income on the file. A loan officer can say how that income would be figured for a specific loan.
Is Home Possible from Fannie Mae or Freddie Mac?
Home Possible is a Freddie Mac program. The guide section that sets its income limit and the eligibility tool page that describes the lookup are both Freddie Mac’s. Fannie Mae’s HomeReady is a separate program with its own income limit. Ask your loan officer which program a figure refers to.
Do you have to live in the home with Home Possible?
Freddie Mac’s guide requires at least one borrower to occupy the property secured by a Home Possible mortgage as their primary residence. It sits in the same guide section as the income limit. Ask your loan officer how the occupancy rule would apply to the people on your loan.
Questions to Bring to Your Loan Officer
Planning around the income limit is simpler when you ask before you shop. So bring questions, not guesses. A short list also keeps the conversation concrete. The loan officer can then look up the figure for a specific address.
- What’s the income limit for this property’s location, and which figure does my lender use?
- Which income would be used to qualify me, and how would it be figured?
- Does Home Possible apply to my purchase, or would another option fit better?
- Would at least one borrower on my loan occupy the home as a primary residence?
When you’re ready, you can talk with a Fellowship loan officer about your situation.
