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  • Rate and Term Refinance
  • Cash Out Refinance
  • FHA Streamline Refinances
  • VA IRRL Refinances
  • Reverse Mortgage Refinance

What is a HomeReady Mortgage?

Sometimes, homebuyers need help from other people for funding a home purchase. Some people rely on family or friends to make a down payment. Others depend on a relative, spouse, or significant other to co-sign to get approval.

If you are one of those scores of people who are in the same situation, a HomeReady loan might be right for you because it is more flexible about allowing contributions from other people.

So, what is a HomeReady loan? A HomeReady mortgage is a conventional, yet flexible, home loan offered by Fannie Mae. It is meant to help low-income to moderate-income borrowers buy for the first time or refinance an existing loan. You are an ideal HomeReady borrower if you have low income, are a first-time or repeat homebuyer, and have limited cash for down payment. HomeReady loans reduce the typical down payment and mortgage insurance requirements.

It also allows family members or friends to co-sign to help get approval. So it is good for prospective buyers relying on others to help fund their home purchase. Additionally, cash gifts from a relative, spouse, or significant other can be used for down payments. Furthermore, down payments can be as low as 3%. HomeReady is relatively new, but it has already helped thousands of borrowers secure the home of their dreams and keep money in their pockets at the same time. “HomeReady has already helped thousands secure the home of their dreams and keep money in their pockets at the same time.”

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What is the Benefit of
HomeReady Mortgages?

Here are some advantages or benefits of a HomeReady mortgage:

  • Secure Approval with Co-Borrowers HomeReady mortgages are flexible in allowing large contribution from others to fund the costs of the loan, like the down payment and closing. Other conventional home loans are not as flexible as approval is based only on the borrower’s personal income. Fannie Mae allows co-borrowers to add their financial support to the approval process. This means that your relatives can help your chances of securing an approval even if those relatives are not planning on living in the house you are purchasing.There is no minimum for your personal contribution. You can fund your whole HomeReady loan from a gift.
  • Lower Down Payment HomeReady mortgages make home buying easier because of lower minimums for down payment and credit score requirements. Fannie Mae allows a loan-to-value, or LTV, ratio of up to 97% for HomeReady mortgages on single family units. This means down payments as low as 3%. This is even lower than the minimum down payment for an FHA loan, which, even with the government backing the lender, is usually 3.5%.
  • Get Approved with Help from Income of Other People Living in Your House If you don’t have a co-borrower, HomeReady loans will allow the income of people living with you to be added as compensating factors. Their incomes will not be added to yours in the approval process. However, their incomes will matter in situations where your debt-to-income ratio is higher than normal. Family members, roommates, boarders will only need to prove that they have been living with you for at least a year. Additionally, if the new house you are purchasing has space for a tenant, you can add the estimated rent as part of your income in the HomeReady loan application.
  • Affordable Mortgage Insurance Premiums HomeReady loans help you minimize and even eliminate the mortgage insurance premiums faster. With HomeReady, you may have the option to cancel your mortgage insurance as soon as the home equity reaches 20%. This means lower monthly payments later on. However, there are restrictions that apply to this. Fannie Mae doesn’t include the upfront premium as part of the HomeReady closing costs. You can therefore put more into your down payment. This can potentially increase the amount you can afford to borrow.

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Call Secure Choice Lending at (951) 707-9364 for more details on the benefits and advantages of HomeReady mortgages.

HomeReady Loans vs. FHA Loans

HomeReady FHA
Down Payment Requirement 3% 3,5%
Lender can order appraisal immediately Yes No
Geographic restrictions on loan amounts None Restrictions Apply
Mortgage insurance can be cancelled (restrictions apply) Yes No

Is HomeReady Only for First Time Home Buyers?

No, you don’t have to be a first-time homebuyer to qualify for a HomeReady loan. However, there are other requirements you have to meet.

How Do I Qualify for a HomeReady Loan?

  • You must have a minimum credit score of 620.If you have a credit score greater than or equal to 680, you may get an even better deal.
  • Your income must be less than or equal to the Area Median Income (AMI). You can look up the AMI of your home address on Fannie Mae’s HomeReady eligibility page. You may be qualified as long as your personal income is not higher than the AMI for the address of the house you want to buy or refinance. If you live in a low-income area, you may not have to worry about income limits.
  • You must only use a HomeReady loan for a primary residence.
  • You must take homeownership courses. The classes are provided online and can be completed in only four hours so it is not too much of an inconvenience.
Our Assistance

Secure Choice Lending Can Assist You With a HomeReady Loan

HomeReady mortgages make home buying easier. Secure Choice Lending is here to make the process even simpler.

Call Secure Choice Lending at 951-733-8925 today for your HomeReady mortgage.

“Secure Choice Lending will make your HomeReady loan application process simple.”

Our Loan Officers will be happy to answer all your questions and discuss your options until everything is clear to you.

Secure Choice Lending is a full service mortgage broker that will secure you a mortgage that doesn’t break the bank.

To streamline the lending experience, our team of financial experts matches consumer needs with the appropriate loan programs and level of risk. With loan officers versed in all mortgage types, solutions to your home-buying questions are a phone call away.


Looking to Refinance?

Refinancing can be a confusing process. We’ll ensure you find it smooth and easy to adjust your existing debt obligations for your benefit.