Fannie Mae’s New HomeReady Program

The Real Deal did a good job in breaking down the new program by Fannie Mae set to be available December 12, 2015 – “Fannie Mae Offers Added Flexibility to Borrowers.”

— Down payments as low as 3 percent.

— No minimum contribution from you — the borrower — toward the down payment on a single-family home purchase. You can supplement your own cash with gifts from relatives.

— You can add the income of one or more resident household members into total household mortgage income for calculating the debt-to-income ratios. These will be “non-borrowers” in Fannie Mae terms — contributors to income but not legal co-borrowers with responsibility for the debt. Under some circumstances where non-borrowers in the household have significant incomes, Fannie may waive its standard debt-to-income ratio limit and consider applications where debt ratios go as high as 50 percent of household income. Total debts include not only the mortgage, but payments for auto loans, credit cards, student loans and the like.

— To add further to income for the purposes of the mortgage, you may be able to bring in “non-occupants” who are helping you make your payments but don’t plan to live in the house. These might be parents, grandparents, siblings or others. When non-occupants are part of the picture, however, the minimum required down payment jumps to 5 percent. The program also allows you to count income from in-house boarders — maybe someone who rents a room or an accessory dwelling or apartment.