HomeReady™ or Home Possible?

Fannie Mae’s HomeReady™ and Freddie Mac’s Home Possible® loan products share some similar advantages, including secondary financing that can provide up to 105% CLTVs. However, there are some differences – that’s why we’ve prepared this comparison chart for you.

Program Features HomeReady™ Home Possible Advantage®
     
First time homebuyer Not required Not required
Income limits No income limits for low-income census tracts. Must not exceed 100% AMI or the slightly higher percentages in some designated high-cost areas. No income limit in an Underserved Area.
Borrower contribution Not required on 1 units; 3% required on 2-4 units Not required on 1 unit; 3% required on 2-4 units
Reserves Determined by DU Determined by LP
Submissions DU only LP only
Minimum MI coverage 6% – 25% depending on the LTV and term 6% to 25% depending on the LTV
Occupancy All borrowers must occupy unless 95% LTV or lower All borrowers must occupy
Non-borrower household income Permitted as compensating factor only for 45-50% DTI Not allowed
Rental income Allowed if the subject property is a 2-4 unit Allowed if the subject property is a 2-4 unit
Boarder income Allowed Allowed
CLTV 97% if non Community Second; 105% if Community Second® 97% if non Affordable Second; 105% if Affordable Second®
Loan programs Fixed-term to 30 years Fixed-term to 30 years
UW submission DU only LP only
GSE must be owner of existing loan Not applicable Not applicable
Homebuyer education requirements/ providers Required for at least one borrower. Provided by Framework Homeownership, LLC. Required for at least one borrower when all are FTHBs. Free online counseling is available through MGIC or Freddie Mac.