Quick answer
A homebuyer education course is required on a Fannie Mae loan when all borrowers are first-time buyers and the loan-to-value is above 95%, on HomeReady and Home Possible purchases when all occupying borrowers are first-time buyers, and by many state assistance programs — Texas’s TDHCA requires it of every borrower. At least one borrower usually has to finish before closing. HUD-approved housing counseling agencies offer courses and one-on-one counseling, often at little or no cost; call 800-569-4287 to find one.
Key facts
95%
Fannie Mae: course required above this LTV if all are first-time
Fannie Mae Selling Guide B2-2-06 · Nov 5, 2025
80%
Home Possible income limit (share of area median)
Freddie Mac Home Possible fact sheet · Feb 1, 2026
When a course is required
Homebuyer education is a condition of certain loans and programs, not of buying a home in general. These are the main triggers:
| Loan or program | When it is required | Who must take it |
|---|---|---|
| Fannie Mae conventional loan | Purchase with loan-to-value above 95% and all borrowers first-time buyers | At least one borrower, before closing |
| Fannie Mae, any purchase | No borrower has a credit account (automated approval) or a credit score (manual) | At least one borrower |
| Fannie Mae HomeReady | Purchase where all occupying borrowers are first-time buyers | At least one borrower |
| Freddie Mac Home Possible | Purchase where all occupying borrowers are first-time buyers, or credit is built only from non-credit payment references | At least one occupying borrower, before the note date |
| TDHCA My First Texas Home | Every loan | All borrowers, through a HUD-certified course |
Because a 3% down payment means a loan-to-value of 97%, first-time buyers putting down less than 5% on a Fannie Mae loan will generally need a course. State and local assistance programs often go further, requiring it of every borrower whatever the down payment. Check who counts as a first-time buyer if you have owned before.
When the Fannie Mae rule applies on a $360,000 home, all borrowers first-time buyers
| Down payment | Loan-to-value | Course required? |
|---|---|---|
| 3% ($10,800) | 97% | Yes, if all borrowers are first-time buyers |
| 4% ($14,400) | 96% | Yes, if all borrowers are first-time buyers |
| 5% ($18,000) | 95% | No (unless HomeReady or no credit history) |
| 10% ($36,000) | 90% | No (unless HomeReady or no credit history) |
The threshold is “above 95%”: at exactly 95%, a standard loan doesn’t trigger it. HomeReady requires the course whenever all occupying borrowers are first-time buyers, whatever the down payment.
Education vs one-on-one counseling
Homebuyer education is a course — online, in a classroom, by phone or a mix — that walks a group of buyers through the process. Fannie Mae accepts courses from any qualified provider independent of the lender, as long as the content follows National Industry Standards or HUD standards.
Housing counseling is individual advice from a HUD-approved agency, built around your own credit, budget and goals. Fannie Mae accepts counseling in place of the course, and HomeReady borrowers who complete housing counseling in the months before closing may qualify for a loan-level pricing credit. Counseling is the better choice if you have credit problems to fix, are weighing several assistance programs or aren’t sure you are ready to buy.
What a course covers
Courses vary by provider, but most cover the whole path from renting to owning:
- Readiness and budgeting — renting vs buying, setting a payment you can carry, and building savings. The rent vs buy calculator is a useful companion.
- Credit — reading your credit report, fixing errors and how scores affect your rate.
- Mortgages — loan types, down payments, mortgage insurance, and assistance programs such as down-payment grants.
- Shopping and the contract — working with an agent, making an offer, inspections and appraisals.
- Disclosures and closing — reading the Loan Estimate and Closing Disclosure and what happens at the closing table.
- Life as an owner — maintenance, escrow for taxes and insurance, and what to do if you fall behind on payments.
Cost, format and timing
Cost depends on the provider. The CFPB says HUD-approved housing counselors offer advice often at little or no cost; ask any provider what it charges before you sign up. Online courses let you work at your own pace; classroom and counseling sessions are scheduled with the agency.
Timing matters more than format. Fannie Mae requires the course to be completed before closing and Freddie Mac before the note date, and the lender keeps your certificate of completion in the loan file. Take it early — ideally before you make an offer — so what you learn can still shape your budget and loan choice.
How to find a course
Ask what counts
Check with your lender and any assistance program which providers they accept. Some programs require a specific course or a HUD-certified counselor.
Find a HUD-approved agency
Call HUD’s housing counseling line at 800-569-4287 or use the CFPB’s search by ZIP code to find agencies near you.
Complete the course or counseling
Choose online, in person or by phone, and finish before your closing date.
Send your certificate
Give the completion certificate to your lender, and keep a copy for any assistance program.
Frequently asked questions
Is a homebuyer education course required?
Only for some loans and programs. Fannie Mae requires it when all borrowers are first-time buyers and the loan-to-value is above 95%; HomeReady and Home Possible require it when all occupying borrowers are first-time buyers; and many state assistance programs require it for every borrower.
How much does a homebuyer education course cost?
It varies by provider. The CFPB says HUD-approved housing counselors offer advice often at little or no cost. Ask what a course costs before you enroll.
Can I take a homebuyer education course online?
Yes, if your lender or program accepts it. Fannie Mae allows in-person, online, telephone or hybrid courses from a qualified provider independent of the lender.
When do I need to finish the course?
Before closing. Fannie Mae requires completion before the loan closes and Freddie Mac before the note date. Starting early gives you time to use what you learn.
Does every borrower have to take the course?
For Fannie Mae and Freddie Mac, at least one borrower must complete it. Some state programs are stricter: Texas’s TDHCA requires a HUD-certified course for all borrowers.
How do I find a HUD-approved housing counselor?
Call HUD’s housing counseling line at 800-569-4287 or search the CFPB’s list of HUD-approved agencies by ZIP code.
Sources
- US Census Bureau, American Community Survey 2024 1-year — Median value of owner-occupied homes (2024 ACS 1-year)
- Fannie Mae Selling Guide B2-2-06 — Fannie Mae requires homebuyer education above this LTV when all borrowers are first-time buyers (Nov 5, 2025)
- CFPB — Minimum down payment on some conventional loans (Oct 28, 2026)
- HUD — HUD housing counseling referral line (Oct 28, 2026)
- Fannie Mae Selling Guide B5-6-01 — Fannie Mae HomeReady income limit (share of area median income) (Jun 4, 2025)
- Freddie Mac Home Possible fact sheet — Freddie Mac Home Possible income limit (share of area median income) (Feb 1, 2026)
- CFPB: Find a housing counselor
- TDHCA: My First Texas Home program matrix
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.