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HomeReady® Mortgages

The HomeReady Mortgage® is designed for creditworthy low- to moderate-income borrowers.

Features

  • Innovative underwriting flexibilities expand access to credit responsibly.

  • New guidelines include:

    • Income from non-borrower household members can be considered to allow for higher debt-to-income ratios

    • Rental unit and boarder income

    • Non-occupant borrowers, such as a parent

  • Financing up to 97% loan-to-value for purchase of one-unit principal residence

  • Up to 95% LTV for limited cash-out refinance

  • Up to 97% LTV for LCOR transactions if the mortgage being refinanced is owned or guaranteed by Fannie Mae

  • Borrower is not required to be a first-time buyer

  • The mortgage insurance is cancellable but coverage is lower compared with standard requirements  

  • Community Seconds®, gifts, grants and cash-on-hand are permitted as a source of funds for down payment and closing costs

  • Non-traditional credit is allowed

  • Supports manufactured housing up to 95% and HomeStyle® Renovation up to 95%

Benefits

  • Low down payment. Up to 97% LTV financing for purchase and refinance transactions.

  • Flexible sources of funds. There are no minimum contribution requirements from the borrower’s own funds for the down payment and closing costs (1-unit properties).

  • Affordable and cancellable monthly MI. Reduced MI coverage requirement above 90% LTV.

  • Homeownership course. The online Framework® course is designed to prepare borrowers for sustainable homeownership.

 

Borrower income eligibility

HomeReady can be used to purchase or refinance single-family homes as long as the borrower meets the income limits of the property location.

 

Borrower Income Eligibility Limit

Area
  • No income limit
  • Properties in low-income census tracts
  • 100% of area median income
  • All other properties





Homeownership education requirement

The HomeReady® mortgage homeownership education requirement is designed to help borrowers prepare for sustainable homeownership.

 

The Framework® course

To qualify, at least one borrower for each HomeReady purchase transaction must complete the Framework® online course.

 

Exceptions  

Buyers can complete the homeownership education course or the counseling program required by the Community Seconds® or down payment assistance program provided by a HUD-approved agency and complete these before closing; if the HomeReady loan involves a Community Seconds® or down payment assistance program.

Buyers who have completed housing counseling prior to entering a sales contract are not required to complete the Framework course.