A HomeReady mortgage is a specific type of home loan offered by Fannie Mae. They are designed to help low- and moderate-income borrowers who are looking to buy a home or refinance their current loans. The primary advantages are lower down payments and reduced private mortgage insurance (PMI) requirements. They are also a lot more flexible when it comes to allowing payment contributions from other people. If you are relying on others to help with your mortgage funding, then a HomeReady loan may be right for you.

HomeReady Advantages

First, let’s take a look at some of the key benefits of the HomeReady mortgage loan program:

  • Financing available up to 97% loan-to-value (LTV) for the purchase of a one-unit principal residence
  • Lower credit score requirements
  • The borrower is not required to be a first-time home buyer
  • Gifts, grants, cash-on-hand and Community Seconds® are allowed as sources of funds for closing costs and down payment
  • More flexible mortgage insurance options, including borrower paid and lender paid solutions
  • Unique underwriting flexibilities such as rental unit income and non-occupant borrowers allow access to credit responsibility
  • More homeownership education through the online Framework® course
  • Allows co-signers to loan, whether it’s friends or family helping with funding

HomeReady mortgages offer more flexibility than traditional FHA loans, especially when it comes to funding down payments and dealing with mortgage insurance premiums. You are able to use funding from various sources that will make for an increased chance of approval. If you plan to have roommates or tenants/boarders, you will also be able to leverage this during the approval process.

HomeReady Guidelines and Requirements

Of course, there are some guidelines that you need to be aware of in order to qualify for a HomeReady mortgage. Though you do not have to be a first-time home buyer, there are certain requirements that will need to be met:

  • Income less than or equal to the area median income (AMI)*
  • Credit score of 620 or higher
  • Mandatory participation in homeownership education/counseling

*Fannie Mae’s HomeReady eligibility page can help you look for AMI qualifications in your specific area.

Transparent Mortgage for San Diego HomeReady Loans

In San Diego County, Transparent Mortgage is your local source for HomeReady mortgage loans and all the information/guidance you need to get started on your lending process. Whether you are looking to refinance your current loan under better terms or planning to buy a home, a HomeReady mortgage may be the right option for you.

Or, it may not be the best plan in your case. Transparent Mortgage’s dedicated loan experts will take the time to review your financial situation and buying/refinancing goals. We have access to many different types of mortgage loans to consider, so we will help you determine what’s right for you and your family. Call us today at (619) 929-0199 for more information about HomeReady loans and get started on your loan pre-approval process.


Beau Hodson

Beau Hodson

About the Author Since 2003, Beau has been a mortgage professional and is a leading mortgage broker and lender in San Diego. As Founder and Senior Mortgage Advisor at Transparent Mortgage, he is truly committed to serving the needs of his clients and raising industry standards for integrity and transparency.