Who are the ideal borrowers for the HomeReady® mortgage program?

The HomeReady® mortgage program is designed for low to moderate-income borrowers, first-time homebuyers, and those looking to purchase a home in designated areas. Ideal borrowers have a stable source of income, a credit score of at least 620, and are able to make a down payment of at least 3%.

What are the income limits for the HomeReady® mortgage program?

The income limits for the HomeReady® program vary depending on the area in which the property is located. In general, borrowers' total household income must not exceed 80% of the Area Median Income (AMI) for the property's location. However, there are no income limits for properties located in low-income census tracts.

Can I use additional sources of income to qualify for a HomeReady® mortgage?

Yes, the HomeReady® program allows for the inclusion of non-borrower household members' income, rental income from an accessory dwelling unit, and boarder income as additional qualifying income sources. This can help borrowers meet the income requirements and afford a larger loan amount.

What are the down payment and closing cost requirements for a HomeReady® mortgage?

HomeReady® mortgages require a minimum down payment of 3% of the home's purchase price. The program also allows for the use of gift funds, grants, and Community Seconds® for down payment assistance and closing costs, making it easier for borrowers to afford the upfront expenses associated with homeownership.

How does the HomeReady® mortgage program compare to FHA loans?

The HomeReady® mortgage program and FHA loans both cater to low to moderate-income borrowers and first-time homebuyers. However, HomeReady® mortgages typically require a lower down payment (3% vs. 3.5% for FHA loans) and have lower mortgage insurance premiums. Additionally, the HomeReady® program has more flexible underwriting guidelines, such as allowing the use of additional income sources and offering lower interest rates for borrowers who complete homeownership education.

HomeReady® Mortgages: Guidelines & Limits