Fannie Mae HomeReady enhanced affordable lending product helps meet the diverse needs of today’s buyers.
Designed for creditworthy, low- to moderate-income borrowers, with expanded eligibility for financing homes in designated low-income, minority, and disaster-impacted communities.
HomeReady expands access to credit and supports sustainable homeownership.
- Low down payment. Up to 97% financing for home purchase with many borrower flexibilities.
- Flexible sources of funds can be used for the down payment and closing costs with no minimum contribution required from the borrower’s own funds (1-unit properties).
- Cancellable monthly MI: Conventional home financing with cancellable monthly MI; reduced MI coverage requirement above 90% LTV supports competitive borrower payment.
- Homeownership education helps buyers get ready to buy a home and be prepared for the responsibilities of homeownership. The required training offers an easy-to-use, online course provided by Framework.
- DU will automatically identify potentially eligible loans.
- Underwriting flexibilities include:
- Borrower is not required to be a first-time buyer;
- Purchase of one-unit principal residence (limited cash-out refi up to 95%).
- Lower MI coverage requirement than standard (25% for LTVs >90% to 97%).
- Allows for nontraditional credit.
- Gifts, grants, Community Seconds®, and cash-on-hand permitted as a source of funds for downpayment and closing costs.
- Supports manufactured housing up to 95% and HomeStyle® Renovation (approved lenders) to 95%.
Offers an innovative new feature that supports extended family households: will consider income from a non-borrower household member as a compensating factor in DU to allow for a debt-to-income (DTI) ratio >45% to 50%.
- Allows non-occupant borrowers, such as a parent.
- Permits rental income from an accessory dwelling unit (such as a basement apartment).
- Allows boarder income (updated guidelines provide documentation flexibility).
Homeownership Education and Post-Purchase Support
Comprehensive homeownership education. Requires online course provided by Framework, and offers additional postpurchase support through the life of the loan to help ensure sustainable homeownership.
- Borrowers will invest 4−6 hours (average) of their time and a modest fee of $75 (paid to Framework) to learn the fundamentals of buying and owning a home, take an online test, and receive a certificate of completion.
- Although one-on-one counseling is optional for HomeReady, Framework will offer borrowers a referral to a HUD-approved counseling agency for additional assistance. Borrowers also have the option to consult a counselor of their choice.
- To further promote sustainability, borrowers will have access to post-purchase homeownership support for the life of the loan through Framework's homeownership advisor service.
See additional information and program updates at:
William (Bill) Ladewig