1 Getting a mortgage through HomeReady or Home Possible
Low-income homebuyers can qualify for Fannie Mae’s HomeReady program or Freddie Mac’s Home Possible financing. With just a 3% down payment, you can get approved, and there is no minimum “required contribution” from the borrower. That leaves open the possibility of receiving the funds as a gift, grant, or loan.
What’s more, up to three percent of the purchase price can be covered by the seller of the home. Asking the seller to pay your closing fees is a good alternative to haggling over the purchase price.
For these low-income mortgages, private mortgage insurance (PMI) premiums may be reduced. You may be able to receive a private mortgage insurance rate that is cheaper than what is offered to borrowers of conventional mortgages.
Finally, applicants with modest incomes may be eligible for further consideration through Home Possible and HomeReady. For instance, if you’re applying for a mortgage via HomeReady, you can include rental income from a roommate who has been a part of your household for at least a year. This can improve your ability to qualify for a loan by increasing your income.
If you have a credit score of at least 620 and your annual household income is less than the applicable maximum in your area, you may be eligible for either HomeReady or Home Possible.