Hi there! I just wanted to give a brief description of the "HomeReady" Loan program, since I've seen a lot of questions about these types of lower down-payment conventional loans.

So, the HomeReady program is a conventional program through Fannie Mae, that allows as little as a 3% down payment on a 1-unit owner occupied property. The borrower must meet specific income requirements to be eligible. They allow a max Loan-to-value of 97% and a Combined Loan-to-value of 105% when "Community Seconds" are used. If there is a non-occupying co-borrower on the loan, they require a 5% down payment minimum.

Some Eligibility Highlights:

- must meet 100% of the Area Median Income (AMI)

- No income requirements for properties located in what is deemed a "low-income" census tract . A "low-income" census tract is defined as an area where the median tract income is no greater than 80% of the AMI

- Generally, there is only 620 minimum FICO score required

- There are no minimum borrower contributions required for a 1-unit

- there is only a 3% minimum borrower contribution for a 2-4 unit property and maximum LTV

- Purchase borrowers must complete a homeownership education course

Some Benefits of Going Conventional:

- much more flexibility with the Private Mortgage Insurance (is not required to be on for 11 years like an FHA loan)

- Have the option to have Lender-paid-mortgage insurance, which can have a lower monthly payment

- if you gain equity quickly, you can have the home appraised to see if you meet loan-to-value requirements to have the Mortgage Insurance dropped earlier without having to refinance

- Non-occupant co-borrowers are allowed!

This is just a brief summary I wanted to write up and share. I hope this helps answer any questions anyone may have!

Sincerely,

Debra Denimarck

Upstate New York, New York

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