The Freddie Mac BorrowSmart Program is designed to assist homebuyers who face challenges saving enough for down payment and closing costs. Managed by Freddie Mac, a major mortgage backer in the U.S., this program offers a credit that can be applied directly to these upfront costs when you obtain a conventional mortgage loan through qualified lenders.
Unlike a loan, the BorrowSmart assistance is typically a non-repayable credit, reducing the financial burden for eligible borrowers. To qualify, borrowers usually must have a household income at or below 80% of the Area Median Income (AMI) for the location of the property, use a Freeman Mac-backed conventional loan such as the Home Possible® or HFA Advantage® programs, and complete a homebuyer education course like Freddie Mac’s CreditSmart® Homebuyer U.
The program’s credits depend on income levels—borrowers with incomes at or below 50% of AMI may receive up to $2,500, while those earning between 50% and 80% of AMI can qualify for around $1,250 to assist with down payment and closing costs. These funds go toward expenses such as appraisal fees, title insurance, and loan origination fees.
To use BorrowSmart, homebuyers should look for participating lenders who offer Freddie Mac loans and ask specifically about the program. Prospective buyers can check local income limits via Freddie Mac’s Area Median Income Lookup Tool. Completing required homebuyer education early helps with timely loan processing.
For those shopping for homes, BorrowSmart can often be combined with other state or local down payment assistance programs, further lowering the upfront costs of homeownership. Importantly, the BorrowSmart credit does not affect the mortgage interest rate.
For more details on down payment help, see our Down Payment Assistance Program article. To understand homebuyer education requirements and benefits, see HUD Counseling Certificate.
Sources:
- Freddie Mac BorrowSmart: https://sf.freddiemac.com/working-with-us/affordable-lending/borrowsmart
- Freddie Mac Area Median Income Lookup Tool: https://sf.freddiemac.com/working-with-us/affordable-lending/area-median-income-lookup-tool
- IRS Publication 530, Tax Information for Homeowners: https://www.irs.gov/publications/p530
- NerdWallet: https://www.nerdwallet.com/article/mortgages/freddie-mac-borrowsmart
