First Time Home Buyers - Home Possible/Home Ready vs FHA

[Devin Ryan]

While this post will be common knowledge for some, it certainly isn't for everyone. I often see everyone recommending FTHBs to immediately look FHA for the "3.5% down payment option" limiting their out of pocket cost. However, there are conventional programs that will give you a stronger offer than FHA, while also allowing you to put only 3% down as well.

The Home Possible (Freddie) and Home Ready (Fannie) programs each allow for borrowers to only put 3% down, while still maintaining the conventional offer. This will save you in the down payment, as well as the extra fees like mortgage insurance on top of this. If you're looking to house hack with a multi-unit property as well, the Home Possible program is also incredibly beneficial. This allows you to still have just a 5% down payment on 2-4 unit property. 

There are some income limitations for qualifying for these programs, but it is certainly one that should be considered for all potential home buyers. There are many programs out there that should be considered and your lender should always be looking out for what makes the most financial sense for your situation. Make sure you're exploring all of these options to put yourself in the strongest position to win! 

[Erickson Sainval]

Great information Devin.