Freddie Mac BorrowSmart℠: What Is It? How Do You Qualify?

Applying for a Mortgage, Mortgage Affordability, Mortgages

With the rising cost of homeownership, it can seem impossible to save enough money for a down payment. Luckily, there are a few programs that provide legitimate down payment assistance. 

With the overall goal of making mortgages more affordable, Freddie Mac’s BorrowSmart℠ program offers credit toward qualifying home purchases for very low- to low-income home buyers.

Read on to learn all about Freddie Mac BorrowSmart℠, including how much you can save, underwriting requirements and what programs might stack with BorrowSmart℠ to lower closing costs even further.

What Is the Freddie Mac BorrowSmart Program?

Freddie Mac BorrowSmart℠ is a low down payment home loan program available through specific lenders. It aims to make homeownership accessible for those on a tight budget. The program offers borrowers credits toward their down payment, while also helping first-time home buyers and current homeowners make informed decisions related to buying a home.

How Much Can Home Buyers Save With BorrowSmart

The credit varies based on income, but qualifying for BorrowSmart℠ can save home buyers up to $2,500 toward their down payment and closing costs. 

Borrowers who earn 50% or less of the area’s median income are eligible for $2,500. Borrowers earning between 50.01% and 80% of their area’s median income can receive up to $1,250 toward their down payment.

Freddie Mac BorrowSmart Eligibility

To qualify for Freddie Mac BorrowSmart℠, you’ll need to meet certain requirements and take a few actions. Here’s what to expect:[1]

  • Income requirements: Your household income must be below 80% of the median income for the county the property is in to qualify for down payment credit.[2]
  • Home buyer education: Borrowers will need to complete home buyer counseling with a U.S. Department of Housing and Urban Development (HUD)-approved housing counselor.
  • Lender loan requirements: You’ll need to meet your lender’s eligibility requirements, too. This usually includes a minimum credit score of 620 and a maximum debt-to-income (DTI) ratio of 45%.
  • Primary residence: Freddie Mac BorrowSmart℠ is generally limited to loans to purchase a primary residence.

Aside from typical eligibility requirements and a no-cost to low-cost course, qualifying for down payment assistance under the BorrowSmart℠ is largely based on income. 

Freddie Mac BorrowSmart℠ Features

There are several features of the BorrowSmart℠ program that are worth mentioning, such as:

  • No first-time home buyer requirement: Eligibility doesn’t hinge on being a first-time home buyer. First-time and repeat home buyers are eligible.
  • No minimum down payment: There’s no minimum required down payment percentage to qualify for the program. 
  • No mortgage insurance requirement: While it may be required by their lender, borrowers don’t need to pay for mortgage insurance to qualify for BorrowSmart℠. 

Additional Home Affordability Options

While BorrowSmart℠ is a helpful program for low-income home buyers, there are other programs and loans that help make mortgages more affordable. So if you don’t qualify for Freddie Mac’s BorrowSmart℠, you may qualify for other low down payment options through Fannie Mae, Freddie Mac or the Federal Housing Administration (FHA).

  • Freddie Mac HomeOne®: Freddie Mac HomeOne® is a conventional mortgage option designed to help first-time home buyers with limited funds make a down payment. It also offers mortgage options that let home buyers pay as little as 3% down.[3]
  • Fannie Mae HomeReady®: This loan program is specifically designed to help credit-worthy low- and moderate-income home buyers, with many options offering down payments as low as 3%.[4] 
  • Freddie Mac Home Possible®: Similar to Fannie Mae HomeReady®, this program is also designed to help low- and moderate-income home buyers by allowing them to buy a home with as little as 3% down.[5] One difference is that Home Possible® may have a slightly higher credit score requirement.
  • FHA Loans: The FHA guarantees government-backed mortgages that offer down payments as low as 3.5%.[6] They’re a great option for borrowers who don’t have the funds to make a larger down payment or whose credit scores may not be high enough to qualify for other loan programs.

Be a Smart Borrower and Check With Your Lender

Being a smart borrower means doing your homework and taking the time to understand all of your options before you get started. As you explore, a mortgage calculator will show how down payment assistance can lower your monthly payment and put homeownership in reach.

BorrowSmart℠ is a great program to help make homeownership more accessible, but it’s important to check with your lender first. Lenders may have additional programs that might be a better fit, and they can help you determine which grants or credits can stack with BorrowSmart℠ to make homeownership more accessible. 

  1. Freddie Mac. “Freddie Mac BorrowSmartSM Marketing and Branding Requirements.” Retrieved December 2022 from

  2. Freddie Mac. “Freddie Mac BorrowSmart℠ Income and Property Eligibility Tool.” Retrieved December 2022 from

  3. Freddie Mac. “HomeOne®.” Retrieved December 2022 from

  4. Fannie Mae. “HomeReady Mortgage.” Retrieved December 2022 from

  5. Freddie Mac. “Home Possible®.” Retrieved December 2022 from

  6. Federal Deposit Insurance Corporation. “203(b) Mortgage Insurance Program.” Retrieved December 2022 from

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