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First-Time Home Buyers

February 29th, 2024 11:17 AM by Sam Kader MLO130505

Fannie Mae (FNMA) rolled out HomeReady program in 2015 that was aimed at credit-worthy buyers who need that extra flexibility on debt-to-income ratios, down-payments and the sources of the funds they intent to use for down-payments and for monthly payments. 

For example, if you have been living at your parents' home or in have been renting, you've gotten student debts and have not saved much for a down payment, or you need to include some of your close relatives to live with you and contribute towards the monthly mortgage payment. Or you need to be able to count the rental income you received from a boarder who rents a room in the house as part of your monthly income - enter the HomeReady program. The program offers the following: 

  • Down payments as low as 3% (all can be gifted). Please watch this short video presentation
  • Credit scores of at least 620.
  • No minimum contribution from you - the borrower towards the down-payment on a singe-family home purchase. You can supplement your own cash with gifts from relatives.
  • You can add the income of one or more resident household members into total household mortgage income for calculating the debt-to-income ratios. Under some circumstances where non-borrowers in the household have significant incomes, Fannie may waive its standard debt-to-income ratio limit and consider applications where debt ratios go as high as 50 percent of household income. Total debts include not only the mortgage, but payments for auto loans, credit cards, student loans, and other revolving debts. 
  • Income from "non-occupants"  such as from your parents, grandparents, siblings and others who are helping you make your payments but don't plan to live in the house can be counted for qualification. When non-occupants income are used for qualification, the minimum required down-payment jumps to 5 percent. 
  • Boarders income can be used for qualification. 
  • Borrowers must complete online home-purchase education course lasting roughly about four to six hours. Here's how to register for the class
  • One-on-one counseling from Department of Housing and Urban Development approved counselors will be counted as a compensating factor in Desktop Underwriter (DU) and allow Debt-To-Income (DTI) ratios up to 50%. 
  • The occupant borrower will now be allowed to own one other residential property but the new property must be an upgrade from an existing one.
  • Please use this lookup for income limits and property eligibility area. 



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Pacific Coast Financial LLC

Lic# MB 78982

1329 N 47th St # 31045
Seattle, WA 98103