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Buying a home can feel out of reach for many first-time buyers—especially those balancing student loans, rising rents, and the challenge of saving for a down payment. Recognizing these obstacles, Fannie Mae introduced the HomeReady® Mortgage Program in 2015 to support creditworthy buyers with modest income and unique living situations.

Whether you’re living with family, sharing housing costs with relatives, or receiving rental income from a roommate, HomeReady® offers flexible underwriting and down payment options that may help you move from renting to owning.

What is the HomeReady® Mortgage?

HomeReady is a conventional loan program designed to help low-to-moderate-income borrowers qualify for financing with greater flexibility than standard loan programs. It supports sustainable homeownership by allowing various income sources and down payment solutions while maintaining responsible lending practices.

Key Benefits of the HomeReady® Program

1. Low Down Payment Requirement

• As little as 3% down on a home purchase for qualified borrowers
• Entire down payment can come from gift funds for eligible 1-unit primary residences, subject to program guidelines

2. Flexible Income Sources

• Household income from non-borrower residents (such as a relative who lives with you but isn’t on the loan) may be used to qualify
• Boarder income from a roommate renting space in your home may be counted toward qualifying income
• Non-occupant co-borrowers’ income (e.g., a parent helping with the loan but not living in the home) may be included; when used, a 5% minimum down payment is required

3. Lenient Debt-to-Income (DTI) Ratios

• Standard maximum DTI is typically 43%; in certain cases, DTI ratios up to 50% may be permitted with strong compensating factors and automated underwriting approval
• All monthly debts (credit cards, car loans, student loans, etc.) are considered

4. Credit Score Requirements

• Minimum FICO score of 620 per Fannie Mae guidelines; additional lender requirements may apply
• Borrowers must demonstrate overall creditworthiness, not just score alone

5. Homebuyer Education Required

• Borrowers must complete a 4–6 hour online homeownership education course
• Education helps ensure long-term success and understanding of responsibilities

6. Property and Income Eligibility

• Subject to area median income limits (use Fannie Mae’s income eligibility lookup tool here)
• Available for 1-unit primary residences using standard conforming loan limits
• At least one borrower must be a first-time homebuyer (defined as not owning a home in the last 3 years)

7. Option to Own One Additional Property

• Borrowers may be permitted to own another residential property in limited circumstances, provided the new home will serve as their primary residence and meets program requirements

How Does HomeReady® Compare to FHA?

HomeReady gives buyers another path to homeownership in addition to FHA-insured loans. It offers competitive rates and reduced mortgage insurance costs in many cases. Depending on your financial profile—including credit score, income, and DTI ratio—we’ll help you determine which option best fits your goals.

Eligible Gift Funds

Down payment and closing cost assistance can be provided by a relative, including:

• Group A: Fiancé, fiancée, or domestic partner who shares a committed relationship and plans to live in the home
• Group B: Spouse, child, or another individual related by blood, marriage, adoption, or legal guardianship

Ready to Learn More or See If You Qualify?

If you’re thinking about buying a home and wondering whether the HomeReady® program could be a fit, a simple conversation is often the best next step. By talking through your goals, timeline, and basic financial details, we can help you understand your options and identify a loan path that aligns with your situation—without any obligation or commitment.

This information is for educational purposes only and is not a commitment to lend, an offer to extend credit, or a guarantee of loan approval. Loan programs, terms, and requirements are subject to change and may vary based on individual qualifications, property characteristics, and market conditions.