Fannie Mae HomeReady and Freddie Mac Home Possible: Best Low-Down Programs

HomeReady (Fannie Mae) and Home Possible (Freddie Mac) are conventional loan programs designed for low-to-moderate income buyers. They offer 3% down payment options with reduced mortgage insurance rates and flexible underwriting — and they're often better than FHA for buyers with decent credit.

HomeReady Key Features

• 3% minimum down payment
• Income limit: 80% of area median income (AMI)
• Reduced PMI rates vs. standard conventional
• Allows rental income from boarders to count toward qualifying
• Non-occupant co-borrowers allowed
• Homebuyer education course required (free online)

Home Possible Key Features

• 3% minimum down payment
• Income limit: 80% AMI (same as HomeReady)
• Allows non-occupant co-borrowers
• Sweat equity allowed for down payment
• No income limit for properties in low-income census tracts
• Homebuyer education required for first-time buyers

HomeReady vs Home Possible vs FHA

• Down payment: All three offer 3–3.5% minimum
• PMI: HomeReady/Home Possible have lower PMI than standard conventional and FHA
• PMI removal: HomeReady/Home Possible PMI is removable at 20% equity — FHA MIP is permanent
• Credit score: FHA accepts 580+, HomeReady/Home Possible typically require 620+
• Income limits: HomeReady/Home Possible have 80% AMI caps; FHA has no income limit