Over the past few months, we have been asked a multitude of questions about the HomeReady™ Mortgage.
Is it only for first-time home buyers? May the down payment really be less than an FHA loan? The questions roll on.
OK, let’s start with how the program was conceived.
According to Fannie Mae, the HomeReady™ program was “designed for creditworthy, low- to moderate-income borrowers, with expanded eligibility for financing homes in designated low-income, minority, and disaster-impacted communities.”
But let us clarify that the program is not only for first-time home buyers. A lot of them, however, find the loan attractive because it offers low down-payment options. Repeat home buyers can apply for this program, too.
To answer another question I’ve been asked over and over again, the HomeReady™ Mortgage can be used to buy a house with a down payment that is actually lower than the minimum required for an FHA loan. Down payments this low mean the borrower will have to carry mortgage insurance, but the advantage to HomeReady™ is that mortgage insurance can be cancelled after the loan has seasoned enough, which is not true for the FHA loan.
HomeReady™ also allows for a borrower to use cash on hand for the down payment, as opposed to the majority of mortgage programs that require the down payment to be sourced. In other words, the monies must have a paper trail, which has been traditionally done by providing bank statements as evidence that a person financing a house has the required funds.
That paper trail is not a requirement for HomeReady™.
There is a lot more to this program, so if you have questions, then call us at 813-707-6200. We’ll be glad to help.
If you’re interested in the HomeReady™ program, or any other low down-payment options, fill out the short form below, and we’ll be glad to give you some more information.