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HomeReady loan income limits

The Federal National Mortgage Association, known as Fannie Mae offers a 3% down payment mortgage program for qualified home buyers.

Couple at settlementHomeReady™ replaces the Fannie Mae’s MyCommunityMortgage (MCM) program.

The HomeReady™ program only requires a 3% down payment and there are NO first-time homebuyer requirements! Prospective home buyers are permitted to obtain the required 3% down payment and other closing costs as a cash gift or grant from an eligible donor (i.e. parent(s), relative, spouse, girlfriend or boyfriend, or a fiancé/fiancée). The money does not need to be yours.

Buyers do not need to bring any of their own money to closing.

The HomeReady™ program allows buyers to use income from anyone living in the house to assist in qualifying (i.e. grandmother's social security).

The loan program does have an income limit that is based on the county-area income where the home is located. Family size is not used to determine income eligibility. However, the program can also be used by borrowers of any income level in low-income census tracts nationwide; and designated disaster areas, such as areas affected by flooding, storms, or wildfire.

HomeReady™ mortgage rates are often below the rates for a typical conventional mortgage.

HomeReady allows for non-traditional credit. Credit scores as low as 620 are permitted.

Public servants (firefighters, police, health care workers, teachers, etc.) and military personnel may access special flexibilities, such as the use of overtime and part-time income to qualify.

Debt-to-income ratio:

Income from a non-borrower household member may be considered for a debt-to-income (DTI) ratio up to 50 percent. HomeReady allows non-occupant borrowers, such as a parent. Debt to income is a simple calculation that evaluates the amount of income and monthly bills.

Because HomeReady™ specifically targets low-to-moderate income households; the loan program waives many of the loan fees that accompany “standard” conventional home loans.

The HomeReady™ loan program usually has discount interest rates.

Private mortgage insurance (PMI) is required for down payments less than 20%, however the monthly cost is reduced.

The program is available as an adjustable-rate mortgage (ARM) or fixed-rate mortgage; with terms choices of 30-years, 20 years, 15-years, or 10 years.

Multi-unit homes are permitted, provided the borrower intends to live in one of the home’s units (i.e.primary residence) property,

HomeReady™ cannot be used for an investment home.

Refinance: Limited cash-out refinance up to 95 percent LTV is an eligible use of this product.

Loan application is made through approved Fannie Mae lenders. Most banks and mortgage brokers offer the HomeReady™ loan program.

Seller paid closing costs: The home seller is permitted (not required) to pay up to 3% of the sales price toward closing costs with a 3% down payment. Read more

Rotating question markFrequently Asked Questions the About HomeReady™ Mortgage Program

Q. Can you refinance into a HomeReady loan?
A. Yes, you can refinance your current mortgage into a HomeReady loan.

Q. Do you have to be a first-time home buyer for HomeReady?
A. There are no first-time home buyer requirements.

Q. Does Fannie Mae HomeReady have income limits?
A. The total annual qualifying income may not exceed 80% of the area median income for the property's location.

Q. Is HomeReady a conventional loan?
A. The HomeReady loan is considered a conventional loan, since it parallels conventional loan guidelines and meets Fannie Mae loan requirements.

Q. What is the minimum credit score for HomeReady?
A. The minimum credit score is 620