Fannie Mae HomeReady

Min. Credit Score 620 Min. 3% Down Payment

Are you a creditworthy homebuyer struggling to save for a down payment? The Fannie Mae HomeReady mortgage could be the solution. This program is designed to help low- to moderate-income individuals achieve homeownership. With HomeReady, you can enjoy the stability of a Conventional mortgage while benefiting from easier qualification. The program offers lower down payment requirements and flexible ways to use your down payment funds. Plus, you could save money on mortgage insurance.

Program features

Loan amounts up to $802,650
Debt-to-income (DTI) ratio up to 50%
Household income at or below 80% of the Area Median Income (AMI)
Homebuyer education is required for first-time buyers
Primary residence

Why choose our Fannie Mae HomeReady?

Ability to lower your monthly payments with a temporary rate buydown option
Cancelable Mortgage Insurance (MI)
Gift funds allowed

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Program details

Loan amounts up to $802,650

Debt-to-income (DTI) ratio up to 50%

Primary residence only

Minimum 3% down payment

Limited cash-out refinance available

Qualifying income is limited to 80% of Area Median Income (AMI)

Rental income can be used as qualifying income

None or up to 6 months reserves, depending on credit score, debt-to-income (DTI) ratio, and fixed or adjustable rate per the Eligibility Matrix

Gifts, grants from lenders or other eligible entities, and Community Seconds are acceptable sources of funds for down payment and closing costs

PMI (private mortgage insurance) is required if down payment is less than 20%

1-unit principal residence, including eligible condos, co-ops, PUDs, and manufactured housing; 2- to 4-unit principal residence (no condos, co-ops, or manufactured housing)

15- or 30-year fixed-rate terms

Available to non-permanent residents

Fannie Mae HomeReady FAQ

What is a Fannie Mae HomeReady mortgage?

A Fannie Mae HomeReady mortgage is a home loan designed to help low- to moderate-income borrowers achieve homeownership. It offers flexible down payment options, reduced mortgage insurance costs, and other benefits to make homeownership more affordable.

Who qualifies for a HomeReady mortgage?

To qualify for a HomeReady mortgage, you typically need:
– A credit score of at least 620
– Income that falls within certain limits based on your location
– A down payment of at least 3%

What are HomeReady's borrower benefits?

– Better than or equal to standard loan pricing
– Lower than standard MI coverage requirements for loans with loan-to-value ratios (LTVs) greater than 90 percent up to 97 percent
– Cancellable MI
– Lower down payment requirements
– Flexible down payment sources (including gifts and grants)
– Potential for down payment assistance programs
– Access to homebuyer education resources

How much down payment is required for a HomeReady mortgage?

You can put as little as 3% down on a HomeReady mortgage. Additionally, the program allows for flexible down payment sources, such as gifts from family and friends or down payment assistance programs.

Can first-time homebuyers use a HomeReady mortgage?

Yes, the HomeReady mortgage is a great option for first-time homebuyers. However, it is also available to repeat homebuyers who meet the program’s income and credit requirements.

Are there income limits for a HomeReady mortgage?

Yes, there are income limits based on your location. These limits are determined by the Area Median Income (AMI). To check if you qualify, you can use Fannie Mae’s Area Median Income Lookup Tool.

Does HomeReady allow a cash-out refinance?

HomeReady allows a limited cash-out refinance of a Fannie Mae to Fannie Mae loan up to a 97 percent loan-to-value (LTV) ratio.

What are the homeownership education requirements for HomeReady loans?

Fannie Mae believes that access to quality homeownership education and counseling can provide borrowers with the critical information and resources they need to make informed decisions that support the long-term sustainability of homeownership.
For HomeReady purchase transactions, if all occupying borrowers are first-time homebuyers, then at least one borrower must complete a homeownership education course from a qualified provider. Fannie Mae HomeView™ can be used to satisfy the homeownership education requirements. HomeView gives first-time homebuyers a clear view into the homebuying process.

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#Yes to self-employed

Fannie Mae RefiNow

Min. Credit Score 620 Min. 3% Down Payment

Reduced documentation
Debt-to-income (DTI) ratio up to 65%
Primary residence
The current loan must be owned by Fannie Mae

VA IRRRL

No Min. Credit Score

Loan amounts up to $2 million
Debt-to-income (DTI) ratio up to 55%
Primary residence only
Limited documentation