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HomeReady Loans

Shopping your mortgage options and looking for ways to save some money? If so, you may have come across the HomeReady loan program offered by Fannie Mae.

The HomeReady program is intended to help home buyers who are unable to commit to a traditional 20% down payment. Offering flexibility around loan terms and adjustable underwriting guidelines, the HomeReady program is a great option for borrowers with lower incomes and lower credit scores.

What is a HomeReady Loan?

HomeReady loans are conforming loans funded by Fannie Mae, which is a government-sponsored enterprise under the Federal Housing Finance Agency (FHFA). 

These loans have reduced down payment requirements and mortgage insurance requirements. They are intended to make home buying more accessible for borrowers with low- to moderate income looking to purchase or refinance homes.

Who is Eligible for the HomeReady Program?

HomeReady loans are ideal for home buyers who have low to moderate incomes, and can still afford a monthly mortgage payment even if they can’t handle a conventional 20% down payment.  

Many people who take advantage of the HomeReady program are first time home buyers

HomeReady Qualification Requirements

There are a number of criteria you must meet in order to qualify for the HomeReady loan program. The qualification requirements include: 

  • You must meet a qualifying credit score: You’ll need to meet a minimum qualifying credit score of 620 to qualify for a HomeReady loan. (Please note: A 620 does not guarantee you will qualify. It is the minimum necessary in order to attempt to qualify. Your credit delinquencies, your income, and your reserves will also be assessed before you are granted approval.)
  • You must NOT own another home in the US: Though the home you’re purchasing with a HomeReady loan does not have to be your first home, you cannot currently own another home in the country to qualify for the HomeReady program.
  • You must participate in an approved homeownership education course.  
  • You must meet income requirements: To qualify for HomeReady, your income must be less than or equal to 80% of your county’s area median income (AMI).

What is the Minimum Credit Score for a HomeReady Loan?

Borrowers need to meet a minimum qualifying credit score of 620 to qualify for a HomeReady loan through Fannie Mae.

What is the Income Limit for a HomeReady Loan?

As mentioned above, a borrower’s income must be less than or equal to 80% of the subject property county’s area median income (AMI). You can learn more about your HomeReady eligibility by checking the area median income for your location here.

Can HomeReady Mortgages Be Used to Finance Any Type of Home?

Unlike some other mortgage programs, HomeReady loans can be used to purchase a variety of home types. One- to four- unit residences are eligible, as long as you will be using one of the units you are purchasing as your primary residence. (Please note that the type of home does change the down payment requirement. Multi-unit and manufactured homes will require a higher down payment.)

Benefits of HomeReady Mortgages

The HomeReady program from Fannie Mae offers a number of key advantages for first time and low income home buyers, including: 

  • Lower Credit Score Requirements
  • Low Down Payment Requirement
  • Flexible Down Payment Options
  • Ability to Cancel PMI Once 20% of Home’s Value is Paid Off

Interested in the HomeReady Mortgage Program? Contact Us Today!

If you’re in the market for a home but you have a limited income, or if you’re a first time home buyer, the HomeReady program could be a great fit for you! 

Wondering if you qualify for HomeReady? Interested in learning more about your home loan options? Our experienced team of mortgage professionals can help you find the home loan that’s right for you, whether it’s a HomeReady loan or another type of mortgage. Once you’ve selected the loan type that fits you best, we’ll guide you through the mortgage process from start to finish.

Ready to get started? Begin the mortgage application process today right here or reach out to us by phone at 518-782-1202 or via our online contact form with any questions you might have.

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