Tap into Down Payment Resources
and Options
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Educate Homebuyers About Down Payment Options Early in the Process
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Communicate Down Payment Programs and Resources Available
STEPS
STEP 2
STEP 3
8
On the Path to Homeownership
Get pre-approved / pre-qualified
save for a down payment
Take a deeper dive with homeownership resources
>> explore my home by freddie mac
A Simple Guide for Navigating
the Homebuying Process
establish a price range
investigate neighborhoods, home styles and communities
finance your mortgage
explore available homes
Sustain Responsible Homeownership
STEP 4
STEP 6
STEP 5
STEP 7
Challenge: Time to save–in high-cost counties, a 20% down payment can take as long as 35.5 years while a 3% down payment takes 5.3 years to save.
Challenge: Not all homebuyers are clear about what they qualify for. In fact, only 9% of renters looking to purchase a home in the next two years start the homebuying process by getting pre-qualified and only 12% take steps to get pre-approved.
What can you do if you're a:
Real Estate
Lender
Borrower
What can you do if you're a:
Challenge: Some borrowers may not be planning their homebuying search based on what they can afford.
What can you do if you're a:
What can you do if you're a:
Challenge: Housing availability is limited and new construction slowed in recent years. In fact, the supply of unsold homes is at the lowest level in four decades.
STEP 8
Challenge: Housing is getting older–nearly 80% of America’s housing stock is at least 20 years old.
What can you do if you're a:
Challenge: Setbacks and incomplete information can cause delays for some homebuyers.
What can you do if you're a:
Challenge: Unexpected expenses, misinformation and emergencies can put homeownership at risk.
What can you do if you're a:
Encourage Pre-Approval
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Build Your Network
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Understand the Application Process
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Leverage your role as a trusted advisor and educate potential homebuyers about additional aspects of the cost of homeownership, including closing costs, commuting expenses, expected maintenance and more.
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Identify and explain financing alternatives to accommodate specific housing styles, like manufactured homes, or mortgage types.
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Now that you’ve gotten pre-approved, take a deeper dive and involve your lender in the financial aspect of your journey early. Narrow down your hunt to properties and communities that meet your needs and fit the bill.
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Showcase Emerging Options
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Provide Guidance About Financing
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Research Exciting Alternatives
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Guide and Empower Buyers to Make the Right Choice for Them
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Identify Financing Options That Meet Borrower Needs
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Design Your Dream Home
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Leverage technology like eClosing to accommodate your clients’ busy schedules and speed up the process.
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Ensure understanding of the complex mortgage process, milestones and borrower deliverables, timing and risks. Streamline the process and identify problems earlier by tapping into technology that automates income and asset assessment.
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Work with your lender to provide your most recent information, including:
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Point homebuyers to valuable resources and education opportunities that can help them develop a spending and savings plan while understanding the importance of saving for unexpected life events.
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Educate homebuyers about refinancing opportunities, home equity, maintaining and improving their home and preparing for emergencies. Provide borrowers with resources and guidance about alternatives to foreclosure. Understand when equity growth may cancel mortgage insurance and reduce monthly payments.
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Take advantage of educational opportunities offered by housing counselors and your lender that will help you create a savings plan, navigate your monthly income vs. expenses and even identify professional contractors.
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Typically, high-cost areas need more time to save and can benefit from low down payment programs. Ensure you’re knowledgeable about low down payment mortgage options and additional sources of down payment assistance that your clients can investigate and apply for.
Source: Freddie Mac calculations using anonymized credit bureau data for Sep 2018. Time to Save is calculated by dividing down payment requirements by monthly savings. According to Bureau of Economic Analysis, average personal savings rate is 6.7% of disposable income in 2018. We estimate disposable income by net income that is calculated by subtracting both federal and state taxes from pre-tax income at the individual-level.
The “20% down” perception still sidelines potential borrowers who may qualify for a mortgage today or in the near future. Educate potential borrowers about ways to raise down payment cash aside from savings, including nonprofit or agency assistance, inheritance, retirement accounts, gifts, etc.
While many buyers believe buying a home requires 20% down, the average down payment for first-time homebuyers is actually 7%. Establish savings disciplines and goals and take advantage of financial technology tools to help you save. (Hint: you may be closer to owning a home than you think).
Save time and prevent headaches later in the process by encouraging homebuyers to get pre-approved before beginning their search.
Build a network with real estate professionals in your community to encourage referrals and help borrowers understand how much they can afford, earlier in the homebuying process.
Don’t get attached to a home that’s out of reach. Instead, gain a clear understanding
of how much you can afford. Your lender will submit your information for approval, assessing your eligibility based on your ability to repay, cash available, collateral and your credit score.
New, innovative homes are emerging as alternatives to traditional housing. In markets where availability is a challenge and new construction is slow, encourage buyers to explore other options, such as:
• Manufactured homes
• Container/tiny homes
• Renovation loans (which can also boost energy efficiency)
Identify and explain financing alternatives to accommodate specific home styles, ages or financing options that make accommodations based on income qualifications vs. Area Median Income.
Struggling to find your dream home? Learn about new options that are emerging on the housing market. Alternatives, like manufactured housing, are making a splash with modern features, energy efficiency, speed and precision to construction and value that has evolved. Other options? Container homes, tiny houses, accessory dwelling units (ADU) and more.
Source: Freddie Mac Chief Economist Sam Khater January 2020.
Provide borrowers with guidance about cost-effective financing solutions that meets their needs in terms of low down payment options, monthly payments, long-term flexibilities and ability to qualify. Renovation financing can also make it easier and more cost-effective for homeowners to finance renovations, repairs and even energy efficient improvements.
Buyers looking for a home, typically searched for 10 weeks. Provide guidance and information on the home, community, amenities to empower buyers to make the best decision for them; inclusive of showing new and older homes and understanding opportunities within each.
Aging housing offers more than affordability and charm. Prospective homebuyers have the opportunity to design the home of their dreams, create a more energy efficient space and protect against damage from natural disasters (all by tapping into new, flexible renovation mortgages and financing opportunities).
Real Estate
Lender
Borrower
Real Estate
Lender
Borrower
Real Estate
Lender
Borrower
Real Estate
Lender
Borrower
Lender
Borrower
Real Estate
Lender
Borrower
Real Estate
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Borrower
* Source: Freddie Mac calculations using anonymized credit bureau data for Sep 2018. Time to Save is calculated by dividing down payment requirements by monthly savings. According to Bureau of Economic Analysis, average personal savings rate is 6.7% of disposable income in 2018. We estimate disposable income by net income that is calculated by subtracting both federal and state taxes from pre-tax income at the individual-level.
STEP 1
Real Estate
Lender
Borrower
approach homebuying with confidence
What can you do if you're a:
Challenge: Navigating the complex homebuying and mortgage process can be overwhelming.
X
Provide Educational Resources
Recommend financial education and understanding of materials outlining the homebuying process.
X
Empower Through Education
Discuss mortgage qualification ability
to help set expectations and outline
next steps.
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Prepare for the homeownership journey by taking advantage of free, online financial education courses, understanding credit score and importance to maintain, building solid savings and spending disciplines and reaching out to reputable and informed housing professionals such as lenders, real estate professionals and housing counselors to guide your journey.
Prepare for Homeownership
Communicate the Overall Cost of Homeownership
Provide Financial Guidance Early
Take Help From the Professionals
Tap into Technology
Simplify the Process with Automation
• Paycheck stubs and proof of supplemental funds
• W-2s and tax returns
• Bank and investment account sources of income and obligations
Organize Your Information
Guide Financial Planning
Help Homebuyers Get Prepared
Stay Informed and Create a Savings Plan
Provide educational guidance
with these customizable resources.
Encourage potential borrowers to take advantage of these free online financial education courses.
Learn more about the most important steps in the homebuying process
Educate borrowers about these low down payment options.
Should you rent or buy? Use our calculator.
Help homebuyers take a deeper dive into their finances.
Read more about real estate professionals and their role as trusted advisors.
Learn more about the mortgage application process.
Share tools and calculators with your clients.
Use this tool to verify if a borrower can qualify for a Freddie Mac Home Possible mortgage.
Get guidance and estimates from these calculators.
What does the next generation of factory-built housing look like?
See if your borrower qualifies for a Freddie Mac Home Possible® mortgage.
Learn how to find the right home
for you.
Learn about market trends and how to better serve the borrower of the future.
Learn about financing options for renovations and improvements.
Learn about financing options for renovations and improvements.
Learn more about eClosing.
Explore Asset and Income Modeler (AIM).
Learn how your lender can help.
Provide education and guidance to help homebuyers avoid credit traps and sustain homeownership.
Help your homebuyer determine if refinancing is right for them with these resources.
Learn about resources and help for maintaining financial health as a homeowner.
Educate homebuyers about these low down payment options.
Educate borrowers about these low down payment options.
Educate borrowers about these low down payment options.
Download the eBook:
What can you do?
investigate neighborhoods, home styles and communities
Explore available homes