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Freddie Mac (OTCQB: FMCC) announced potential homebuyers earning 50% of area median income or less will be eligible for a $2,500 credit that may help with down payment and other costs at closing under a new initiative that begins on March 1. The funds can also be used to cover closing costs, escrow and mortgage insurance premiums.

The credit will be available through Freddie Mac’s Home Possible mortgage product, which offers options and credit flexibilities to help very low- to low-income borrowers attain homeownership with a downpayment as little as 3%. It also will be available through Freddie Mac’s HFA Advantage mortgage product, which is available exclusively to housing finance agencies.

“Today’s announcement is a vital lifeline for would-be homeowners, as studies show that down payment and closing costs are among the largest barriers to homeownership for very low-income homebuyers,” said Sonu Mittal, senior vice president and head of single-family acquisitions at Freddie Mac. “Our commitment to supporting these families runs deep, as we have provided assistance to this population through various programs since 2018. We are pleased to now make this assistance more broadly available to borrowers through our Home Possible program.”

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