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IBMC offers Fannie Mae HomeReady® Mortgage loans for low to moderate-income creditworthy borrowers. This is a conventional loan product with high loan-to-value ratio financing, waived loan-level pricing adjustments (LLPAs) and reduced mortgage insurance. Explore the features and benefits that make this loan product so appealing.
Income limits - Annual qualifying income may not exceed 80% of the AMI for the property’s location.
Terms - 15- or 30-year fixed-rate mortgages available.
Low down payment - As little as 3% down on a one-unit property with no first-time home buyer requirement. LTV requirements vary based upon subject property type.
Eligible properties - Primary residence only. Condos, PUDs, and manufactured housing are acceptable. 2–4-unit properties are allowed if the borrower occupies one of the units.
Homeownership education – This is required for purchase mortgage loans when all occupying borrowers are first-time homebuyers.
Innovative underwriting flexibilities – This includes boarder income, accessory dwelling units, non-occupant borrowers, sweat equity and cash on hand.
Favorable pricing – LLPAs are waived, which translates to potentially lower interest rates and monthly payments.
Mortgage insurance (MI) - MI is offered at reduced levels and can be cancelled within the same parameters as a conventional loan.
$2,500 very-low-Income purchase credit (VLIP) – Fannie Mae is providing a temporary grant to credit-worthy, very-low-income borrowers that are utilizing the HomeReady product. The $2,500 grant is available now through February 2025 to assist with down payment and closing costs. As a reminder, below you will find information on how to apply this grant to your applicable loans with IBMC.
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Traditional core and delegated channels - When registering a HomeReady® Mortgage loan, you will now have the option to select that the borrower is eligible for the VLIP $2,500 credit. You will also need to ensure that you have appropriately identified the credit as a Federal Agency Grant in your DO/DU findings and listed it on your CD as a credit to the borrower. It is imperative that you ensure a borrower meets the eligibility criteria for the credit, as the bank will be funding the credit at closing, and then receiving reimbursement from Fannie Mae when the loan is funded — shown as an LLPA credit.
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Alliance and Heritage Channels - When registering a conventional loan under the Alliance or Heritage channels, IBMC staff will inform you if the loan is eligible for HomeReady® and potentially the VLIP $2,500 credit. The credit will not be applied until income has been validated with applicable income documentation by the IBMC underwriting team.
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Alliance banks - These banks will be required to fund the $2,500 credit at closing. The bank will receive reimbursement from Fannie Mae when the loan is funded — shown as an LLPA credit.
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Heritage banks - These banks will not fund the $2,500 credit at closing. IBMC will fund the credit as they handle the disbursement of funds on Heritage transactions.
Links
Fannie Mae HomeReady® Mortgage Page
Fannie Mae VLIP $2,500 Down Payment Assistance Page
HomeReady VLIP Job Aid
Fannie Mae Area Median Income Lookup Tool
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