On June 24th the FNMA (Fannie Mae) announced that they will be raising the income limits for their HomeReadyTM mortgage for 2022 by an average of $8,480 or 12.3% over last year. This is good news as it will allow some borrowers whose area medium income was too high to qualify in 2021 to be able to get the loan now.
Launched by Fannie Mae in December 2015, the HomeReadyTM Mortgage program was created to help lenders provide loans for creditworthy low- and moderate-income (LMI) borrowers, and encourage the financing of homes in low-income, minority, and disaster-impacted communities. According to Fannie Mae, the ideal HomeReadyTM borrowers:
- Have income that is equal or less than 80% of their county’s area median income (AMI).
- Are first-time or repeat homebuyers.
- Have limited cash for down payment.
- Have a credit score greater than or equal to 620, and those with scores greater than or equal to 680 may get better pricing.
- Has supplemental boarder or rental income.
- Is looking to purchase or refinance.
Other HomeReadyTM Mortgage loan considerations:
- Can have up to 97% LTV.
- Down payments can be as low as 3%.
- Allowable down payment sources can include gifts, grants, and cash on hand. There is no minimum requirement for the borrower’s own funds.
- HomeReadyTM can offer reduced mortgage insurance coverage for loans above 90% LTV. Mortgage insurance is cancellable.
- Can refinance up to 95% LTV with a HomeReadyTM Mortgage