What is a HomeReady loan?

Several loan programs can help home buyers with a lower income and low down payment. One such program is the Fannie Mae HomeReady mortgage.

You could pay as little as 3% down with a HomeReady loan. That’s $12,000 down on a $400,000 home. This is even less than the FHA’s 3.5% down payment requirement.

Plus, you could use gifts, grants, or a down payment loan to help cover your upfront costs. And co-borrowers living in the home, or outside of it, can be on your application. This makes HomeReady one of the easiest mortgage programs to qualify for.

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Basic requirements for HomeReady include:
 

•  You cannot earn more than 80% of your Census tract’s median income
   

• You need a FICO score of at least 620 in most cases
   

• The home must be your primary residence
   

• You should have a debt-to-income ratio (DTI) that’s no higher than 50%. This is more lenient than most other mortgage programs
   

• You must agree to complete a 4-6 hour online homeownership education course