HomeReady Low Down Payment Home Loan

HomeReady Mortgage - Low Down Payment

HomeReady Mortgage – Low Down Payment

In the post Mortgage Meltdown era, we continue to see sensible buyer-friendly home loan options come back to life.  HomeReady is one of those amazing mortgage products.  Both first time and repeat home-buyers can take advantage of a low down payment HomeReady home loan.

Apply Now for a HomeReady Home Loan

HomeReady Home Loan Benefits

The HomeReady home loan program helps low and moderate income borrowers buy a home.  Benefits of this great Conventional Loan option include:

  • 3% Down Payment
  • Reduced mortgage insurance payments
  • Cash on hand allowed for down payment/closing costs
  • Debt to income ratio limits up to 50%
  • Parent can co-sign with borrower
  • Rental income of an accessory dwelling (ex: basement) allowed
  • Boarder income (someone renting part of the dwelling) allowed
  • Reduced interest rate in many scenarios

HomeReady Loan is Based on Area Median Income

HomeReady requires that 2 criteria be met in order be eligible.  Eligibility for a HomeReady home loan is based on:

  • Subject property location
  • Area Median Income (aka “AMI”).

Fannie Mae created 3 income categories for the HomeReady program.  Each category defines what a borrower may earn compared to the median area income for the property’s census tract.  The income categories are:

  1. No income limit when property is in a low-income census tract (31% of all US census tracts)
  2. 100% of the Area Median Income allowed for property in a high minority tract or a designated disaster area (20% of all US census tracts)
  3. 80% of the Area Median Income for all other properties (49% of all US census tracts)

Apply Now for a HomeReady Home Loan

Home Ready not “New” – Just Refreshed

HomeReady is not a unique mortgage.  In fact, loans just like have been around for decades.  On top of that, many of the loan features found in HomeReady are currently available in various current mortgage options.

First off, Fannie Mae has rolled out similar home loans in the past.  For example, My Community was the HomeReady of the early 2000’s.   Also, FHA allows high debt to income ratios.  In addition, FHA allows parents to co-sign.  In addition, they also offered and lower mortgage payments.

On top of that, standard Conventional loans already allow a 3% down down payment.  Currently, USDA also uses property and income criteria to determine eligibility.  So what is so special about HomeReady?

Home Ready combines multiple mortgage product features into one home loan.  In conclusion, borrowers that choose a HomeReady mortgage are treated to several loan benefits all in one  home loan.

By Jeremy House


Related posts:

Speak Your Mind