Chic vs. Geek: HomeReady Mortgage

Are you a first-time homebuyer without a lot of money for a down payment? Fannie Mae has a program that might work for you, but there are pros and cons...

CHIC (PEARL)

Fannie Mae’s HomeReady program can help you make a property pencil out with a low 3% down payment and additional flexibility to apply gifts, grants, and cash-on-hand to your down payment and closing costs. You also get the benefits of affordable and cancelable mortgage insurance — unlike FHA loans — and valuable homeownership education so you understand all of the factors at play. Check this quick start guide for more.

GEEK (KEVIN)

So what’s the downside? Well, you need a good credit score just to qualify for a HomeReady loan, and there are income restrictions that could leave you on that bubble of making too much to meet the limit but not enough to make the purchase work. And a lower down payment means additional financing and higher interest rates, which may not fit your monthly budget. Find out if you qualify using this simple map tool.