We understand the financial challenges many homebuyers are facing. They can’t afford a large down payment; may have multiple student loans; or may rely on income from non-traditional sources (i.e., parents or other family members). These challenges can make homeownership seem impossible, or may have impacted their ability to buy a home in the past.
Not anymore. After much research and feedback from both homebuyers and lenders, Fannie Mae created HomeReady mortgage, an enhanced affordable loan designed to meet the diverse financial and familial needs of responsible, creditworthy buyers.
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Know the Features & Flexibilities
HomeReady mortgage addresses common financial challenges and offers expanded eligibility guidelines, such as:
- Offering a 3% down payment option. First-time and repeat homebuyers can purchase a home with a down payment as low as 3% of the purchase price.
- Supporting extended families. For the first time, income from a household member who is not a borrower (i.e., they won’t be on the mortgage) will be considered. This means in multi-generational households, the income of children, grandparents, other extended family members and non-relatives may help buyers qualify for a HomeReady mortgage.
- Allowing co-borrower flexibility. All borrowers do not have to reside in the property. For example, parents, who won’t be living in the home, can be co-borrowers on the loan to help their children qualify for a mortgage and purchase a home. Income limits may apply.
- Accepting additional income sources. Rental payments may be considered as another allowable income source to help qualify a buyer (i.e., rental payments from a basement apartment).
Homeownership Education Requirement
HomeReady mortgage has a homeownership education requirement to help buyers prepare for the responsibilities of buying and owning a home. Buyers can complete an online homeownership course offered by Framework® to fulfill the requirement. One-on-one homeownership advising (i.e., through a HUD-approved counseling agency) may also be an option for buyers who could benefit from personalized assistance. If you seek one-on-one advising, speak with your lender beforehand to confirm that you’ll meet the HomeReady mortgage education requirement.
For more details and to see if you qualify for a HomeReady Mortgage, talk to a lender. Your lender may have other affordable financing options for you to consider as well. Always compare and shop around for the mortgage that works best for your financial situation.