What is HomeReady® and HomePossible®?
HomeReady® and HomePossible® are two versions of conventional mortgage programs. Both programs aim to serve low to moderate income households and income areas.
Discounted Rates & Mortgage Insurance
Both HomeReady® and HomePossible® have discounted monthly mortgage insurance options and discounted rates. These discounts are designed for borrowers with low down payments (or little equity if refinancing).
No Income Limits
If you’re buying in a low to moderate income area, there is no income limit to use the program. You can use the tools below to see any possible income limits. Keep in mind that the qualifying income for a mortgage that we use might be different than the income reported on your tax return (lower or higher).
Eligible for Refinancing and Buying
Many people think that these programs are only for homebuyers. However, the good news is that it can be used for refinancing a property that you currently own as well. If someone has credit less than 720 or less than 20% equity and is income eligible then it may be worth looking at using this for a refinance as well.
Good Alternative to FHA
FHA can be a great loan program for some – however, both of these programs make conventional loans a more attractive option to compete with low down payment programs. Since these programs have come out, FHA’s market share has dropped a bit.
HomeBuyer Class Requirements – HomeReady®
A home buyer class is required (with a few small exceptions) if a borrower uses HomeReady® and buys a home. Any HUD approved class is acceptable if completed before entering a sales contract. Also, the below approved class is acceptable anytime during the process – the below class is typically $75 (vs HomePossible®’s which is free so many times, lenders will recommend HomePossible®)
HomeBuyer Class Requirements – HomePossible®
A homebuyer class is only required if nontraditional credit is used to qualify OR when all borrowers are first time homebuyers. If it’s required, only one borrower is required to take the class (which is FREE). Both the HomeReady® and HomePossible® classes typically take borrowers two hours or less.