HomeReady and Home Possible Loans for Low-to-Moderate Income Borrowers in Royal Palm Beach, FL
HomeReady and Home Possible Loans are two conventional loan programs offered by Fannie Mae and Freddie Mac, respectively. They are designed for low-to-moderate individuals and can help make homeownership more affordable and accessible to them.
If you are in a bind and can’t find a suitable mortgage because you can’t make a large down payment, consider applying for HomeReady or Home Possible Loan as they require a minimum of 3 percent down payment. That’s not all – continue reading to see how HomeReady and Home Possible Loans can be an excellent option for you.
Royal Palm Beach Home Ready and Royal Palm Beach Home Possible Loans
- A minimum down payment of 3 percent is required
- Cancellable mortgage insurance
- HomeReady is offered by Fannie Mae
- Home Possible is offered by Freddie Mac
- Borrowers can use rental income to qualify for the loan
Down Payment requirements
Both HomeReady and Home Possible Loans require a minimum 3 percent down payment. If you are putting less than 20 percent down, you must pay for private mortgage insurance. The cost of mortgage insurance, unlike FHA loans, isn’t included in the upfront cost of the loan. Instead, it is paid as monthly premiums. Moreover, mortgage insurance with both HomeReady and Home Possible Loan is cancellable under certain circumstances.
Properties Allowed with Royal Palm Beach Home Ready and Home Possible Loans
You can use HomeReady or Home Possible Loan to buy 1 to 4-unit owner-occupant homes. Investment properties and second homes cannot be purchased with these conventional loans. Condos, 2 to 4-unit homes, townhomes, and single-family homes are eligible, and non-warrantable condos don’t qualify.
Both HomeReady and Home Possible Loans allow co-borrowers (non-occupant) to help a borrower qualify for the home loan. These borrowers have to be related to the primary borrowers. For example, a family or relative can be a co-borrower. Rental income may also be considered a qualifying income to help a borrower qualify for the mortgage.
Borrower Eligibility Requirements
The minimum credit score required to qualify for HomeReady and Home Possible Loan is 620. Moreover, both these loans require borrowers to complete a homebuyer education course. A borrower can qualify for these loans four years following Chapter 7 Bankruptcy, four years following in lieu of foreclosure, and two years after the discharge date of Chapter 13 Bankruptcy.
Income Eligibility Requirements
Since both HomeReady and Home Possible Loan programs are designed for borrowers with low-to-moderate incomes, they come with income limits. The income limits of these two loans used to be different, but recent revisions on the limits have made them the same. Now a borrower in Royal Palm Beach may qualify for a HomeReady or Home Possible Loan if their income is less than 80 percent of the area median income for the home’s location.
Both HomeReady and Home Possible Loan programs are ideal for borrowers with low-to-moderate incomes. They have lower down payment requirements than FHA loans and offer income flexibility, improving the borrower’s chances of qualifying for a mortgage. If you want to break into homeownership and meet the requirements of HomeReady and Home Possible loans, consider applying for them.
For more information regarding these loan programs, call Fourpath Mortgage at 954-507-7553.