For many years, FHA capitalized the mortgage industry with Its low-down payment option. That was until the Introduction of Fannie Mae's HomeReady and Freddie Mac's 3% down products. Conventional products, both Home Ready and Home Possible offer reduced mortgage Insurance as well as low down payments. Arguably one of the better features of the programs, there is no first-time home buyer requirement.
Maximum Financing and Flexibility
Three Percent Down Payment Solution with Expanded Options
In addition to its minimum down payment requirement, both products offer options to responsibly increase homeownership. Do-it-yourselfers can apply sweat equity to assist in meeting their down payment and closing costs, co-borrowers who do not live in the home can be included for a borrower’s one-unit residence, borrowers may also be eligible to obtain financing while owing one additional financed property, and more – all at very attractive interest rates!
Loan to Value (LTV) Ratios
Low down payment with a maximum of 97% LTV, 105% TLTV, 97% HTLTV for 1-unit properties.
It Is possible to obtain financing with a minimum 620 credit score. Co-signers are also permitted.
1-4 units, condos and planned-unit developments; manufactured homes are eligible with certain restrictions.
Flexible Sources of Down Payments
Down payment can come from a variety of sources, including family, employer-assistance programs, secondary financing, and sweat equity.
Unlike its government counterpart, Mortgage insurance (MI) can be canceled after loan balance drops below 80 percent of the home’s appraised value, and MI coverage requirements are reduced for LTV ratios above 90 percent.
15- to 30-year fixed-rate mortgages; 5/1, 5/5, 7/1 and 10/1 ARMs; super conforming mortgages.
No cash-out refinancing option is available for borrowers who occupy the property.
With the exception of designated low Income neighborhoods, both products have Income limitations.
97% HomePossible — $250,000 purchase price. 3% down — 4.375% (APR 4.894%) — P&I + MI $1327.98 — T&I $ 255.00 *borrower to confirm the taxes and insurances rate.