Exciting news for first-time homebuyers and repeat buyers! Fannie Mae is pleased to announce a temporary enhancement to its HomeReady® program, aimed at supporting homeownership opportunities for creditworthy, very low-income borrowers. This enhancement features a $2,500 loan-level price adjustment credit designed to assist very low-income purchase borrowers with their down payment and closing costs.

HomeReady presents an optimal solution tailored to the needs of creditworthy low-income borrowers, offering not only a low down payment but also expanded financing flexibility. Whether individuals are first-time or repeat buyers, HomeReady provides an ideal pathway to homeownership in today’s real estate landscape.

Effective Date: This credit will be applicable for purchase loans closing on or after March 1, 2024, up to February 28, 2025.

To overcome some of the barriers faced by very low-income borrowers, Fannie Mae is temporarily providing a $2,500 credit to eligible HomeReady borrowers. Here are the key requirements:

• Income Limit: Borrower(s) must have total qualifying income equal to or less than 50% of the applicable area median income (AMI) limit for the subject property’s location. See look-up tool below.
• Direct Application: The full credit amount must be directly provided to the borrower as part of the transaction, allowing it to be utilized for down payment and closing costs, including escrows and mortgage insurance premiums.
• Usage: The credit can be used to meet the 3% minimum contribution for all loans secured by one-unit properties or loans secured by two- to four-unit properties with the loan-to-value (LTV) ratios less than or equal to 80%. Additional funds must comply with standard Fannie Mae requirements for the source of funds. For loans secured by two- to four-unit properties with LTV ratios greater than 80%, the credit may be applied to the down payment after the 5% minimum contribution is met, following Fannie Mae Guidelines.
• Credit Criteria:
  • Minimum FICO: 620
  • Minimum Down Payment: 3%
  • Homebuyer Counseling Certificate required
  • Discounted Private Mortgage Insurance (PMI) applies