What Is HomeReady?
HomeReady is a Fannie Mae mortgage program designed for low-to-moderate income borrowers. It requires just 3% down and offers reduced private mortgage insurance (PMI) rates compared to standard conventional loans. Your household income must be at or below 80% of the area median income (AMI) for the property location.
What makes HomeReady unique is its flexibility with income sources. You can count boarder income (a renter living in your home), non-borrower household income for qualification, and accessory dwelling unit (ADU) rental income.
The edge over FHA: HomeReady PMI is cancellable once you reach 80% LTV. FHA mortgage insurance lasts the life of the loan. Over time, HomeReady can save you tens of thousands in insurance costs.
Who HomeReady Is For
- Borrowers earning at or below 80% AMI for the property location
- First-time and repeat homebuyers purchasing a primary residence
- Multi-generational households who can leverage boarder or non-borrower income
- Buyers who want cancellable PMI instead of lifetime FHA insurance
Key Features
620 minimum credit score. Up to 50% DTI. The entire 3% down payment can come from gift funds, grants, or Community Seconds. Homebuyer education required (available free online). PMI rates are reduced and cancel automatically at 78% LTV.