HomeReady Versus Home Possible Mortgage Guidelines
This BLOG HomeReady Versus Home Possible Mortgage Guidelines Was PUBLISHED On March 20th, 2019
Many home buyers often contact us at Gustan Cho Associates and want to know the difference between HomeReady Versus Home Possible.
HomeReadyconventional loans are offered by Fannie Mae
- Home Possible conventional loans are offered by Freddie Mac
- There is no major difference between Fannie Mae’s
HomeReadyVersus Home Possible
- Both conforming loan programs were created and launched to promote homeownership by offering low down payment for home buyers
- Home buyers do not have to be first time home buyers to qualify for Fannie Mae
HomeReadyor Freddie Mac Home Possible
- Home buyers can borrower up to 105% CLTV of the purchase price of the home if combined with a second mortgage loan
- Fannie Mae and Freddie Mac are two separate Government Sponsored Enterprises (GSE) so these two loan programs are not exactly the same
We will discuss Fannie Mae HomeReady Versus Home Possible on this blog.
Down Payment Requirements
Both Fannie Mae
- Home buyers can purchase 2 to 4 unit owner occupant units with both HomeReady and Home Possible
- Differences between Fannie Mae HomeReady versus Home Possible is that with Fannie Mae, borrowers need to come up with 3% down payment borrower contribution when buying 1 to 4 unit multi-family units
Freddie Mac does not mandate borrower contribution when buying 1 to 4 unit properties.
Types Of Properties Allowed With HomeReady And Home Possible
One to four unit owner-occupant properties
- Second homes and investment properties are not eligible for
HomeReadyand Home Possible financing
- Non-Occupant borrowers are allowed if the loan-to-value is at 95% LTV or lower
- Single-family homes, townhomes, PUD, condos, and two to four unit homes are eligible properties
Non-warrantable condos and condotels do not qualify.
Non-Occupant Co-Borrower Guidelines
Fannie Mae and Freddie Mac allow non-occupant co-borrowers. NON-Occupant co-borrowers do not have to be related to main borrowers like FHA Loans. Both Fannie/Freddie allows boarder income as qualifying income. If the borrower has a history of having a roommate for at least the past 12 months and the roommate has been paying rent, that rental payment can be counted as qualified income.
Borrower Eligibility Requirements
Borrowers need to meet Conforming Guidelines. Minimum credit scores to qualify is 620 FICO. 4 years after Chapter 7 Bankruptcy. 4 years after