Home Ready and Home Possible
There are two really great loan programs offered by Fannie Mae (Home Ready) and Freddie Mac (Home Possible) that combine low down payment loans with superior mortgage terms.
These products even have better terms in many cases than standard conventional financing at a variety of down payment amounts.
- 3% Down minimum for loan amounts up to $766,550 5% Down minimum for loan amounts $766,551-$1,149,825.
- If putting less than ten percent down, reduced mortgage insurance in comparison to standard financing (with various MI options, more info here: https://alexjaffe.com/mi) No MI with 20%+ down.
- Credit score tolerant for credit scores 680-739 (Lower credit scores don’t have as much an effect on rate as on standard conventional financing)
- Maximum income is 80% of the median household income. In DC the 2024 income cap is $120,320. To look up what the income limit is, use these two tools:
Freddie Mac: Home Possible Income and Property Eligibility and just type in the property address.
Fannie Mae: Home Ready lookup just type in the property address.
Both Home Possible / Home Ready require completing a first time buyer class. We will need the certificate after completion. This class works for both programs and is the one I recommend https://creditsmart.freddiemac.com/paths/homebuyer-u/
It’s absolutely worth considering these products as comparisons against both FHA and standard conventional financing. Or as comparisons against 0% down loans. I’m happy to help you figure out what the best plan for financing is.