Home Possible Income Limits: Who Qualifies for Freddie Mac's 3% Down Loan, and Can You Use It on a New Home?
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The Home Possible income limit is 80% of the area median income (AMI) where the home is located. Freddie Mac's Seller/Servicer Guide (Section 4501.4, current as of Bulletin 2026-15, Nov. 4, 2026) says your qualifying income ""must not exceed 80% of the Area Median Income for the location of the Mortgaged Premises."" If you fit under that line, you can buy with as little as 3% down on a one-unit home, and the home can be brand new.
The limit is not one national number. It changes by county and even by census tract, so the only safe way to know is to look up the exact address. Below, we walk through how the limit works, what else Home Possible asks for, and what changes when you buy a home that a builder is still finishing.
What are the Home Possible income limits in 2026?
Freddie Mac uses one rule everywhere: your yearly qualifying income cannot be more than 80% of the AMI for the home's location. Freddie Mac's Bulletin 2026-F (May 28, 2026) says the AMI limits ""have been updated for 2026 and will be effective on June 13, 2026,"" and that ""FHFA provides the Area Median Income estimates to Freddie Mac."" Freddie Mac's own news post from the same day says most areas showed an increase over 2025.
Two details trip people up:
It is your qualifying income, not your whole household. The limit is measured against the income your lender uses to qualify you for the loan.
Lenders cannot use other AMI charts. The Guide says lenders ""may not use other published Area Median Income versions,"" such as the ones on HUD's website, to decide if you qualify.
To check an address, use Freddie Mac's Home Possible eligibility map. Type in the address of the home you want, and it shows the income limit for that spot.
How much do you need to put down on a Home Possible loan?
On a one-unit home with a fixed-rate loan, the Guide allows up to 97% loan-to-value. That means a 3% down payment. Here is what Freddie Mac's Guide (Section 4501.7) and its February 2026 fact sheet allow:
Home Possible rule | What it allows |
|---|---|
Income limit | Up to 80% of area median income |
Max loan-to-value, fixed rate, 1 unit | 97% (3% down) |
Max loan-to-value, fixed rate, 2-4 units | 95% |
With an Affordable Second | Total loan-to-value up to 105% |
Occupancy | Primary residence only |
Mortgage insurance | Reduced coverage above 90% LTV; can be cancelled later |
Freddie Mac's fact sheet says eligible sources for your down payment and closing costs include ""gifts, grants, cash on hand,"" plus ""Affordable Seconds®, sweat equity and Employee Assisted Housing (EAH) benefits."" On a one-unit home, the Guide does not require a minimum amount from your own pocket.
What does 3% down look like on a new home?
Here is an EXAMPLE only, using Freddie Mac's 30-year fixed average of 7.18% for the week of Nov. 5, 2026 (Freddie Mac PMMS). Your own rate will be different.
EXAMPLE numbers | Amount |
|---|---|
Example home price | $350,000 |
3% down payment | $10,500 |
Example loan amount | $339,500 |
Principal and interest at 7.18% (30 years) | about $2,300 a month |
Most a builder can credit toward costs (3% at over 90% LTV) | $10,500 |
That monthly figure does not include taxes, insurance or mortgage insurance. For today's numbers on a real home, call 561-704-0091.
What credit score do you need for Home Possible?
There is no single minimum score when the loan goes through Freddie Mac's automated system. The Guide says your credit is acceptable when the loan ""receives a Risk Class of Accept"" in Loan Product Advisor.
If the loan is underwritten by hand, the Guide sets minimum scores. It is 660 for a one-unit fixed-rate purchase, 680 for a one-unit ARM, and 700 for a 2- to 4-unit home. If no borrower has a credit score, the fact sheet says you ""may be underwritten for up to 95% LTV"" using other payment history.
For debt-to-income, the Guide says the limit is ""Determined by Loan Product Advisor"" on automated loans, and 45% on loans underwritten by hand.
Do you have to be a first-time buyer?
Home Possible is not limited to first-time buyers. Being a first-time buyer matters for one step: homebuyer education.
The Guide (Section 4501.9) requires at least one occupying borrower to take a homeownership course before closing when all occupying borrowers are first-time homebuyers. Freddie Mac lists its own free course, CreditSmart Homebuyer U, as one that counts. The fact sheet adds that the course ""must not be provided by an interested party to the transaction,"" so a builder's own class does not count.
The Guide also says occupying borrowers cannot own more than two financed homes, counting the one being bought.
Can you use Home Possible on a new-construction home?
Yes. Nothing in Freddie Mac's Home Possible rules leaves out newly built homes. The Guide even names Construction to Permanent loans in the Home Possible chapter, and Section 4602.1 says those loans must be secured by ""a newly built or constructed 1- to 4-unit site-built home.""
Most buyers in a builder's community do not need a construction loan, though. You sign a contract, the builder finishes the home, and you close with a regular purchase loan. Three rules matter more in that case:
The builder counts as an ""interested party."" Freddie Mac's Guide (Section 5501.6) says the builder is ""always considered"" an interested party.
Builder credits are capped. When your loan-to-value is over 90%, the most the builder can pay toward your costs is 3% of the price. Between 75% and 90% it is 6%, and at 75% or less it is 9%. Those credits can pay only your closing costs and up to 12 months of HOA dues.
Anything over the cap shrinks your price. The Guide says money over the limit ""must be deducted from the purchase price"" when your lender figures your loan-to-value.
Freddie Mac also says an Affordable Second ""may not be funded by the property seller or any other interested party."" So a builder cannot be the source of your second loan.
What is the difference between Home Possible and HomeReady?
They are close cousins. Fannie Mae's February 2026 HomeReady fact sheet lists an ""income limit 80% of AMI (all areas),"" financing ""up to 97% loan-to-value,"" and ""reduced MI coverage requirement above 90% LTV; cancellable MI."" Home Possible matches all three.
The differences are in the details. Freddie Mac's second-loan program is called Affordable Seconds, while Fannie Mae's is Community Seconds. Freddie Mac also allows sweat equity toward the down payment. Which one fits you best depends on your lender and your file, so ask your lender to price both. Our HomeReady income limits guide covers the Fannie Mae side.
What changed for Home Possible in 2026?
Freddie Mac made a few changes this year:
New income limits. The 2026 AMI limits took effect June 13, 2026 (Bulletin 2026-F).
No unsecured loans for cash. Bulletin 2026-1 says unsecured loan proceeds ""may no longer be used as a source of funds"" for Home Possible, starting April 12, 2026.
No super conforming loans. The same bulletin says super conforming mortgages are no longer eligible.
A credit for very-low-income buyers. Bulletin 2026-A extends a $2,500 credit on Home Possible Very-Low Income Purchase loans through Feb. 28, 2027, for buyers at or below 50% of AMI with at least one first-time buyer.
What this means for new-construction buyers
If you are shopping new homes and your income is near the line, check the exact address on Freddie Mac's map before you fall in love with a lot. The limit can change from one tract to the next.
Next, ask your lender how any builder incentive fits under the 3% cap at 97% loan-to-value. A big closing-cost credit can push past the cap, and the extra gets taken off your price for the loan math. Ask for a Loan Estimate that shows the credit.
Last, plan for the calendar. New homes can take months to finish, and your income, debts and documents may need to be checked again before closing. If your income rises above the limit before the loan is approved, ask your lender how that affects your file.
Want help comparing communities where your loan fits? Call 561-704-0091 for today's numbers.
Common Questions
What is the Home Possible income limit?
Your qualifying income cannot be more than 80% of the area median income for the home's location. The limit changes by area. Check the exact address on Freddie Mac's Home Possible eligibility map.
Is Home Possible only for first-time buyers?
No. Home Possible is not limited to first-time buyers. If all occupying borrowers are first-time buyers, at least one must take a homeownership education course before closing.
How much down payment does Home Possible need?
On a one-unit home with a fixed-rate loan, Freddie Mac allows up to 97% loan-to-value. That is a 3% down payment. Gifts, grants and Affordable Seconds can help cover it.
Can I use Home Possible on a brand-new home?
Yes. Freddie Mac's Home Possible rules do not exclude newly built homes. Builder credits are capped at 3% of the price when your loan-to-value is over 90%.
What credit score do I need for Home Possible?
There is no set minimum when Loan Product Advisor gives an Accept. For loans underwritten by hand, the minimum is 660 on a one-unit fixed-rate purchase. Borrowers with no score may qualify up to 95% loan-to-value.
Can the builder pay for my Affordable Second?
No. Freddie Mac says an Affordable Second may not be funded by the seller or any other interested party. The builder counts as an interested party.
Ready to take the next step?
Call 561-704-0091 to talk with a National House Search specialist, or Schedule a visit.
Related reading: HomeReady income limits · How much is a down payment on a house? · Seller concession limits · Homebuyer education course
This is general information, not financial, tax or legal advice. Figures checked November 6, 2026.