Freddie Mac announced on Monday that it would offer a $2,500 credit for downpayment and other closing costs to support some lower-income families. To qualify, potential homebuyers would need to earn 50% of the area’s median income or less.
The credit will be extended to families who qualify for the company’s Home Possible and HFA Advantage products. The program is scheduled to begin March 1.
“This new effort continues the progress we made in 2023 and is particularly important in today’s housing market, where elevated rates and low supply have created affordability challenges for many families,” said Sonu Mittal, head of Freddie Mac’s single-family acquisitions division, in a statement. “We look forward to announcing additional ways to support low-income borrowers in the months ahead.”
Fannie Mae announced last month a similar $2,500 loan-level price adjustment for very low-income borrowers who are purchasing a home. Fannie’s credit can also be used for downpayment and closing costs.
Freddie Mac financed about 800,000 home purchases last year. First-time homebuyers represented approximately 51% of those purchases, the highest number since the company started tracking that statistic three decades ago.