Fannie Mae HomeReady Mortgage
3% down conventional loan for buyers at or below 80% of area median income
HomeReady is a conventional mortgage that any participating lender can offer. It allows 3% down on a one-unit primary residence, counts flexible income such as rent from a boarder, and comes with mortgage insurance that can be cancelled once you build equity. It is not a grant. The down payment can come from gifts, grants, and approved second mortgages, which is why so many state and county programs pair with it.
Funding was available the last time we checked.
Last verified Sep 23, 2026. Program terms change; confirm with the administrator before you rely on them.
At a glance
- Amount
- 3% down conventional loan for buyers at or below 80% of area median income
- Type of help
- Other help
- Where
- Nationwide
- Run by
- Fannie Mae, offered through participating lenders
- First-time buyer
- Repeat buyers welcome
- Income limit
- Up to 80% of area median income
- Homebuyer education
- Required
How the other help works
A special purchase path, discount, or loan type that lowers what you need at closing.
- Monthly payment: Yes
Who qualifies
- Repeat buyers welcome. Repeat buyers qualify. When every occupying borrower is a first-time buyer, at least one must complete homeownership education.
- Income. Total qualifying income of the borrowers at or below 80% of the area median income for the property's location, using Fannie Mae's published AMI figures. Fannie Mae's income lookup tool checks an address (checked 2026-09-23).
- Property types: Single-family, Townhouse, Condo, PUD, Co-op, 2 to 4 units if owner-occupied, Manufactured home with restrictions. Must be your primary residence.
- Purchase or limited cash-out refinance only. Fixed-rate or eligible adjustable-rate loans.
- Maximum loan-to-value is 97% on a one-unit home, meaning 3% down.
- Homeownership education is required when all occupying borrowers are first-time buyers. Fannie Mae's free HomeView course satisfies it.
- Borrowers who complete housing counseling within 12 months before the loan may earn a pricing credit from Fannie Mae through the lender.
- Seller-held second mortgages are not allowed. Approved Community Seconds from agencies and nonprofits are.
How to apply
- 1Run the address through Fannie Mae's income eligibility lookup or ask any lender to. The 80% AMI cap is based on where the home is, not where you live now.
- 2Ask lenders you are comparing to quote HomeReady next to FHA. Sean does not steer buyers to any lender; nearly every lender offers this product.
- 3If everyone on the loan is a first-time buyer, complete Fannie Mae's free HomeView course before closing and keep the certificate.
- 4Tell the lender about any down payment assistance so the second mortgage or grant is underwritten with the HomeReady loan.
Watch out for
- 3% down is not 3% cash. Closing costs and prepaids are on top unless a grant, seller credit, or lender credit covers them.
- The income cap is on the borrowers' qualifying income, but the AMI figure comes from the property's location. Moving your search across a county line can change the answer.
- Mortgage insurance is required until you reach 20% equity, though it is cheaper than standard coverage and can be cancelled. Compare against FHA's lifetime premium.
- Credit standards are set through Fannie Mae's automated underwriting and the lender's overlays. A stronger score usually means a better rate and cheaper mortgage insurance.
HomeReady versus FHA is the comparison I ask every lender to run for a buyer under the income cap. The cancelable mortgage insurance is often the deciding factor.
Straight answers
Do I have to be a first-time buyer?
No. HomeReady is open to repeat buyers as long as the income cap and occupancy rules are met. Education is required only when all occupying borrowers are first-time buyers.
Can my down payment come from a grant or a second mortgage?
Yes. Gifts, grants, and approved Community Seconds from public agencies and nonprofits can cover the down payment and closing costs. Seller-held second mortgages are not allowed.
Can I count income from a roommate?
HomeReady allows rental income from a boarder under Fannie Mae's documentation rules, which can help you qualify. Your lender will tell you what proof is needed.
Sources
- Fannie Mae, HomeReady Mortgage product page (read Sep 23, 2026)
- Fannie Mae Selling Guide B5-6-01, HomeReady Mortgage Loan and Borrower Eligibility (read Sep 23, 2026)
- Fannie Mae, HomeView homeownership education course (read Sep 23, 2026)
Program details are summarized from public sources and change without notice. Funding badges reflect the last time we checked, not a guarantee of availability. This is buyer education from a real estate agent, not a loan pre-approval or a commitment to lend. Eligibility is decided by each program administrator and your lender. Equal Housing Opportunity.
Programs are the easy part. Timing is the hard part.
Most buyers lose assistance on a deadline, not on eligibility. Sean helps you map out the counseling, the lender conversation, and the contract dates so nothing slips.