The Fannie Mae HomeReady™ mortgage offers an enhanced, affordable lending product with low down payment options and flexible credit qualifying standards for Seattle area home buyers!
In January 2016, Fannie Mae retired the My Community Mortgage® Program and introduced the HomeReady™ Mortgage Program.
The HomeReady™ Mortgage program is designed to provide mortgage options to credit worthy, low- to moderate-income clients with an expanded eligibility for financing homes in designated low-income, minority, and disaster-impacted communities.
Watch This Short Video I Made Explaining Fannie Mae HomeReady™
What Does Credit Worthy Mean?
The HomeReady™ Mortgage program refers to “credit worthy” as a borrower that has a minimum credit score of 620. Click here to apply for a HomeReady Mortgage
In order to be “credit worthy”, the borrower and non-occupant co-borrower (if applicable) must meet the conventional post bankruptcy (4 year wait), short sale (4 year wait) , and foreclosure (7 year wait) qualifying guidelines.
What Does Low-to-Moderate Income Mean?
Like other down payment assistance programs, the HomeReady™ Mortgage program is designed to assist families that need a little help when it comes to purchasing a home.
The U.S. Dept of HUD applies designated AMI codes (area median income) for areas throughout each county in Washington State. The AMI is a statistic for purposes of determining the eligibility of applicants for certain federal housing programs. HUD determines AMI on an annual basis for each metropolitan area and non-metropolitan county, making adjustments for household size and other factors.
The HomeReady™ Mortgage has 3 levels of income eligibility:
1. Area allowing for 80% of the AMI (most common)
2. Area allowing for 100% of the AMI
3. No income limit
For example, in Everett, Wa, using the 98208 zip code, you’ll see the AMI $85,100/yr, and the eligibility code allows for 100% use of the AMI (gross annual household income). Therefore the max household income to qualify for a HomeReady™ Mortgage is $85,100.
But check this out – if you were to cross interstate-five into the 98203, 98204, or 98201 zip codes, the AMI is still $85,100, BUT the eligibility code has NO INCOME LIMIT. There are no restrictions to household max income. This is huge to know!
Examples of HomeReady™ Mortgage Eligibility By City
* Seattle HomeReady™ Mortgage Eligibility – mostly 100% of AMI $85,100 (with multiple areas of NO INCOME LIMITS near hwy 522 in North Seattle)
* Everett HomeReady™ Mortgage Eligibility – mostly 100% of AMI $85,100 (with multiple areas of NO INCOME LIMITS)
* Mt. Vernon, Wa HomeReady™ Mortgage Eligibility – mostly 100% of AMI $68,200 (with multiple areas of NO INCOME LIMITS near East College Way toward Skagit Valley CC)
* Marysville HomeReady™ Mortgage Eligibility – mostly 100% of AMI $85,100 (with multiple areas of NO INCOME LIMITS near downtown Marysville/State Avenue)
Use this link to look up areas you may be considering buying, then contact me when you are finished so that I can verify the information you find (PS – calculating AMI income can be confusing). HomeReady Income Lookup
8 HomeReady™ Mortgage Facts You Want To Know
(1) Minimum 3% Down Payment
(2) Allows for the use of gift funds
(3) Allows for a non-occupant co-borrower
(4) Allows for the use of rental income from accessory unit (basement/additional room)
(5) Flexible debt-to-income ratio limits, possibly up to 50% vs 45%
(6) Requires a course in home ownership education (we offer them)
(7) Low Private Mortgage Insurance premium factor
(8) Very low 30-yr fixed rate
The HomeReady™ Mortgage Summarized
The most common reason why a HomeReady™ Mortgage is used is for it’s reduced monthly PMI factor associated with the low 3% down payment benefit. Also, I can also confirm that homebuyers enjoy the ability to use the rental income from an accessory unit in the house they are purchasing to help them qualify for their new mortgage.
How to Get Approved For A HomeReady™ Mortgage
I encourage you to reach out to me through email or phone to have a mortgage planning discussion surrounding your mortgage goals and budget. There are so many additional factors that go into qualifying for a HomeReady™ Mortgage, it’s important that you are working with a professional that understands the ins and outs of this new program.
To apply for a HomeReady™ Mortgage, visit my Mortgage Concierge Page and follow steps one and two.
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