The HomeReady mortgage program is a special program through Fannie Mae for low to moderate income families. Fannie Mae recently announced some changes to this program that may allow more home buyers to take advantage. Here’s an overview of the HomeReady Mortgage Program changes:
Income Requirement Increases
Income requirements are typically calculated based on a percentage of the median income in the area. The limits have now been raised to match 100% of the median income. This means that more home buyers will qualify!
Since this program targets first time home buyers, taking a homeownership course is one the prerequisites. In the past, only classes offered by Framework qualified. However, home buyers may now receive one-on-one guidance directly from a qualified lender. This allows buyers to qualify more quickly than waiting for classes to be offered in their area.
There are two other important changes related to education. First, buyers looking to refinance (with only a small amount of cash out) are no longer required to take a course. Secondly, buyers purchasing multi-family properties (up to 4 units) are not required to take landlord education.
Previously, homebuyers looking to use the HomeReady Mortgage Program were not allowed to own any other residential properties. This is no longer true with the recent changes. This important change extends the program to more buyers.
HomeReady Mortgage Program Changes Coming Soon
In addition to the above changes that are already in effect, a few other significant changes are expected later this year. The first is a 3% down payment option. Low down payments allow cash-sensitive buyers to take advantage of this program. Buy Down and Adjustable Rate Loans will be allowed on three and four unit properties. Lastly, incentives will be offered to buyers who opt for one-on-one counseling with a lender (as opposed to the formal classes).
These HomeReady Mortgage Program changes take a huge step in allowing more homebuyers to qualify for a mortgage. If you are looking to purchase a home, contact me for a free pre-approval. I will evaluate your qualification for HomeReady and other special programs available.