The HomeReady™ Mortgage

About The HomeReady™ Mortgage

HomeReady™ is a mortgage program created in December 2015. The HomeReady™ mortgage loan is backed by the U.S. government via Fannie Mae.

HomeReady™ allows a down payment of 3% and permits "income pooling" for all members of a household.

This means that income from grandparents, parents, relatives, and working children can all be used to help qualify for a home loan. For many families, this can mean the difference between getting approved for a loan and getting turned down.

HomeReady™ can also be used for a refinance, allowing up to 95% loan to value (LTV) in some cases.

In order to be eligible for the HomeReady™ program:

1. You must not own other residential property in the United States
2. You must complete a 4-6  online homeowner counseling course

If you meet the above criteria, you may be HomeReady™ eligible.

HomeReady™ Questions and Answers:

Is HomeReady™ for first time home buyers only?

No, the HomeReady™ mortgage loan can be used by first time and also repeat buyers.

Is HomeReady™ the same thing as the MyCommunityMortgage?

No. HomeReady™ is a new mortgage program as of December 2015. It is not the same as a MyCommunityMortgage (MCM) and in some respects, HomeReady™ can be viewed as a replacement.

The MyCommunityMortgage program was retired by Fannie Mae in late 2015.

Do I have to call Fannie Mae in order to apply for a HomeReady™ mortgage?

No, you do not have to call Fannie Mae to get a HomeReady™ home loan. Fannie Mae has authorized its approved mortgage lenders to issue HomeReady™ loans. Call me today, 303.668.3350 or Apply Now!

Do I need to have excellent credit to use the HomeReady™ program?

The HomeReady™ mortgage program is available to homeowners who have a credit score of 620 or better.

I do not have a credit score. Can I still use the HomeReady™ program?

Yes, you can still utilize the HomeReady™ mortgage loan program if your credit score is not reporting. The program allows for the use of non traditional trade lines to establish credit history including utility bills and most other accounts that require monthly payment.

What are interest rates for the HomeReady™ loan?

Interest rates for a HomeReady™ mortgage loan are the same as interest rates for a "traditional" loan.

Can I use the HomeReady™ mortgage loan for a condominium?

Yes, HomeReady™ mortgage loans can be used for condominiums.

Can I use the HomeReady™ mortgage loan for a co-op?

Yes, HomeReady™ mortgage loans can be used for co-ops.

Can I use the HomeReady™ mortgage loan for a manufactured housing?

Yes, HomeReady™ mortgage loans can be used for manufacturing housing.

Can I use the HomeReady™ mortgage loan for a multi-unit home?

Yes, HomeReady™ mortgage loans can be used for 2, 3 and 4 unit homes. They cannot be used for a residential building zoned for 5 units or more.

What is the HomeReady™ program's minimum down payment requirement?

The HomeReady™ mortgage program is a low down payment loan requiring a minimum down payment of three percent.

Can my down payment on a HomeReady™ home be a cash gift from a relative?

Yes, your down payment on a HomeReady™ loan can be a cash gift from a relative, a spouse, a girlfriend or boyfriend, or a fiancé/fiancée. The money does not need to be yours.

What fixed rate mortgage options do I have with the HomeReady™ loan program?

Borrowers using the HomeReady™ loan program have access to a complete mix of fixed rate mortgage products, including the 10 year fixed rate mortgage; the 15 year fixed rate mortgage; the 20 year fixed rate mortgage; and, the 30 year fixed rate mortgage.

What adjustable rate mortgage options do I have with the HomeReady™ loan program?

Borrowers using the HomeReady™ mortgage have access to adjustable rate mortgage (ARM) products, including the 5 year ARM; the 7 year ARM; and, the 10 year ARM.

Can I use HomeReady™ to refinance?

Yes, you can use HomeReady™ loan to originate a rate and term refinance however you may not use the program to do a cash out refinance.

My parents live with me. Can I use their income to help qualify for a mortgage?

Yes, this is the purpose of the HomeReady™ loan program. You are allowed to use the income of a person living in your home to help you qualify for your home loan.

My children live with me. Can I use their income to help qualify for a mortgage?

Yes, this is why the HomeReady™ mortgage program was created. The income of a person living in your home can be used to help you qualify.

Can I use income from someone whom is not my parent or child with the HomeReady™ program?

Yes, when using the HomeReady™ mortgage program, you can use the income of anybody living in your home to help get mortgage qualified. This can be your aunt, your uncle, a brother or sister, a friend, or anyone else.

If I use the income of somebody living in my house to help qualify for the HomeReady™ loan, does that person need to be on the mortgage application?

No, you do not need to include other people on your HomeReady™ mortgage application even if their income is used to help you qualify.

In order to use another person's income on your application, you will only need to show that person's proof of income and a signed statement indicating their intent to live with you for a period of at least 12 months.

Do I have to show a history of co-habitation in order to use a relative's income for my mortgage approval?

No, prior co-habitation is not required in order to use a relative's income on your HomeReady™ mortgage application. You are only required to show a signed statement which indicates your co-habitant's intent to live in your home for a period at least 12 months.

Is there a maximum allowable number of co-habitants with the HomeReady™?

No, the HomeReady™ program does not limit the number of relatives living in one home, nor the number of relatives whose income is used to help qualify for the program.

How much of my own money do I need to bring to closing with the HomeReady™ program?

You are not required to bring any of your own money to closing with the HomeReady™ mortgage program. Your down payment can be gifted to you from a third party, and you can have the home seller pay for your closing costs using an option known as seller concessions.

Is there a maximum debt-to-income ratio with the HomeReady™ mortgage?

Yes, the HomeReady™ program limits borrowers to a 50% debt to income ratio.

Does the HomeReady™ mortgage loan require private mortgage insurance (PMI)?

Yes, the HomeReady™ program requires borrowers to pay private mortgage insurance (PMI) when they borrow more than 80% of the home's value.

Is it true that private mortgage insurance (PMI) costs for the HomeReady™ program are lower than with other conventional loans?

Yes, the HomeReady™ program features lower mortgage insurance costs than other conventional loans, including the other three percent down program, the Conventional 97.

How long must I pay private mortgage insurance under the HomeReady™ program?

HomeReady™ is a conventional mortgage loan via Fannie Mae, which means that you are required to pay private mortgage insurance until your home's loan-to-value (LTV) reaches 80% of the original purchase price, or 80% of the home's market value.

HomeReady™ loans are available in low income census tracts. What is a "low income census tract"?

A low income census tract is an area in which the median household income is at least 20% below the average median household income for an area. Homes in low income census tracts are eligible for HomeReady™ regardless of their annual household income.

HomeReady™ loans are available in high minority census tracts. What is a "high minority census tract"?

A high minority census tract is an area in which the minority population is at least 30%, and in which the median household income is less than the median household income for the area.

Can I use the HomeReady™ loans if I don't live in a low income census tract or a high minority census track?

Yes, you can use the HomeReady™ program even if you do not live in a low income census tract or a high minority census tract so long as your household income is not above the area median income.

My household is not considered low income. Can I still use HomeReady™?

Yes, you can use HomeReady™ if your household is not considered "low income" so long as you are buying a home in a low income census tract. There are no maximum or minimum income restrictions for borrowers with homes located in low income census tracts.

I earn a large income, but I live in a low income census tract. Can I use HomeReady™?

Yes, regardless of your income, if your home is in a low income census tract, you can use the HomeReady™ mortgage loan program.

Can I still use HomeReady™ if I am not considered a "minority"?

Yes, you do not need to be considered a minority to use the HomeReady™ mortgage loan. HomeReady™ is available to everyone who qualifies.

What's the smallest down payment allowed with HomeReady™?

The HomeReady™ program requires a minimum down payment of 3% of the purchase price.

Can I use boarder income to help get approved for HomeReady™?

Yes, the HomeReady™ program allows a borrower to use boarder income to help get qualified. Boarders must have a 12 month history of living with you and contributing income.

Do I have to take homeowner counseling courses as part of the HomeReady™ mortgage program?

Yes, homeowner counseling is required with the HomeReady™ program. Classes are provided online and can be completed in 4-6 hours.

I have taken homeowner counseling courses previously. Can I apply my completion certificate toward HomeReady™?

Yes, you can use the certificate from your previous homeowner counseling course as part of your HomeReady™ mortgage application, so long as the course was completed within the last six months. Note that beginning October 1, 2016, prior certificates must be renewed.

The HomeReady™ mortgage program is designed to help more U.S. households get approved for low down payment loans. Borrowers can use income from relatives and non relatives for purchase and refinance home loans.

How do I get started with the HomeReady™ mortgage loan program?

Call me now, 303.668.3350 or click here to apply!

Apply Now!
Get the Insider Track on Interest Rates!

Cheers!

Scott Synovic
Nations Reliable Lending, LLC
Colorado's Mortgage Expert
www.scottsynovic.com
303.668.3350 Direct

NMLS: 253799 / NRL NMLS: 181407
Regulated by the Division of Real Estate

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