HomeReady

HomeReady is a Fannie Mae program designed to help low-to-moderate income borrowers achieve homeownership with as little as 3% down payment and reduced mortgage insurance costs.

The program offers flexibility in income sources, allowing you to count income from non-borrower household members, border income, and other sources that wouldn't qualify with standard conventional loans.

HomeReady combines the benefits of low down payment conventional financing with affordable mortgage insurance and flexible qualification guidelines, making it an excellent option for income-qualified buyers.

Down Payment: Both allow 3% down, but HomeReady has reduced mortgage insurance costs, making monthly payments lower.

Income Flexibility: HomeReady allows counting income from other household members (even if not on the loan), which can help you qualify for a larger loan amount.

Mortgage Insurance: HomeReady PMI is typically 20-40% lower than standard conventional PMI, saving you thousands over time.

Income Limits: HomeReady has income limits (100% of area median income in most areas, 115% in high-cost areas), while standard conventional doesn't.

Property Location: Some properties qualify based on location in low-income census tracts, regardless of borrower income.

Education Requirement: HomeReady requires an online homebuyer education course, which only takes a few hours and can qualify you for reduced MI.

Income Limits: Your household income must be at or below 100% of Area Median Income (AMI) in most locations, or 115% AMI in designated high-opportunity areas.

What Counts: All household members 18 and older must have their income counted toward the limit, similar to USDA loans.

Qualifying Income: For debt-to-income calculations, you can use income from anyone living in the home, even if they're not on the loan (with proper documentation).

Boarder Income: Rent from a boarder (someone renting a room) can be used to qualify, which is unique to HomeReady.

Non-Occupant Co-Borrower: A family member not living in the home can co-sign and their income counts for qualification but not toward income limits.

Check Your Area: Income limits vary by county. Your lender can tell you if you qualify based on your specific location and household size.

Property Type: Single-family homes, townhouses, condos (must be Fannie Mae-approved), and 2-4 unit properties are eligible.

Primary Residence: Must be your primary residence. Second homes and investment properties don't qualify.

Property Location: Some properties in low-income census tracts qualify regardless of borrower income, expanding eligibility.

Property Condition: Must meet standard appraisal requirements. Property should be in good, livable condition.

2-4 Units: Multi-unit properties are allowed, and you can use rental income from other units to qualify.

Condos: Condo projects must be on Fannie Mae's approved list. Many condos qualify, but manufactured homes on leased land typically don't.

Low Down Payment: Just 3% down required, preserving your savings for emergencies and home improvements.

Reduced MI: Lower mortgage insurance costs than standard 3% down conventional loans save you money every month.

Flexible Income: Count income from non-borrowers in the household, making it easier to qualify.

Gift Funds Allowed: Your entire down payment can be a gift from family, nonprofit, or government agency.

Competitive Rates: HomeReady rates are the same as standard conventional loans—no rate penalty for using the program.

PMI Removal: Like all conventional loans, PMI automatically terminates at 78% LTV or can be requested at 80% LTV.

Second Chance: Even if you've had credit issues like bankruptcy or foreclosure in the past (with proper waiting periods), you may still qualify.