# HomeReady

> HomeReady is a Fannie Mae conventional loan for low- to moderate-income buyers, with a small down payment and an income cap tied to area median income.

URL: https://mail.mortgage-math-us.com/glossary/homeready/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

**HomeReady** is Fannie Mae’s conventional mortgage for borrowers whose total qualifying income is no more than 80% of the area median income (AMI). It allows a loan-to-value ratio up to 97% on a one-unit principal residence — a 3% down payment — and you don’t have to be a first-time buyer.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| Income limit (share of AMI) | 80% | [Fannie Mae Selling Guide B5-6-01](https://selling-guide.fanniemae.com/sel/b5-6-01/homeready-mortgage-loan-and-borrower-eligibility) | Jun 4, 2025 |
| Fannie Mae maximum LTV, one-unit purchase | 97% | [Fannie Mae Eligibility Matrix](https://singlefamily.fanniemae.com/media/20786/display) | Apr 1, 2026 |
| Combined LTV with a Community Seconds loan | 105% | [Fannie Mae Selling Guide B5-5.1-02](https://selling-guide.fanniemae.com/sel/b5-5.1-02/community-seconds-loan-eligibility) | May 3, 2023 |

## What sets it apart

- **Income cap, not a buyer test.** Only the qualifying income of the borrowers counts, checked against Fannie Mae’s AMI figures for the property’s location. Where AMI is $100,000, qualifying income can be at most $80,000.
- **Flexible down payment money.** Gifts, grants and [down-payment assistance](https://mail.mortgage-math-us.com/glossary/down-payment-assistance/) seconds are allowed; with a Community Seconds loan the combined LTV can reach 105%.
- **Education.** If every occupying borrower is a [first-time homebuyer](https://mail.mortgage-math-us.com/glossary/first-time-homebuyer/), at least one must complete a homeownership education course before a purchase.
- **Uses.** Purchases and limited cash-out refinances of one- to four-unit principal residences.

You still pay [private mortgage insurance](https://mail.mortgage-math-us.com/glossary/private-mortgage-insurance/) with less than 20% down, and it can be cancelled like on other conventional loans. The [first-time buyer programs guide](https://mail.mortgage-math-us.com/first-time-buyers/programs/) compares HomeReady with other options.

## Related terms

- [Home Possible](https://mail.mortgage-math-us.com/glossary/home-possible/), Freddie Mac’s counterpart

## Sources

- [Fannie Mae Selling Guide B5-6-01](https://selling-guide.fanniemae.com/sel/b5-6-01/homeready-mortgage-loan-and-borrower-eligibility) — Fannie Mae HomeReady income limit (share of area median income) (Jun 4, 2025)
- [Fannie Mae Eligibility Matrix](https://singlefamily.fanniemae.com/media/20786/display) — Fannie Mae maximum LTV, one-unit principal residence purchase (Apr 1, 2026)
- [Fannie Mae Selling Guide B5-5.1-02](https://selling-guide.fanniemae.com/sel/b5-5.1-02/community-seconds-loan-eligibility) — Fannie Mae Community Seconds maximum combined LTV (May 3, 2023)
- [Fannie Mae Selling Guide B5-6-01: HomeReady loan and borrower eligibility](https://selling-guide.fanniemae.com/sel/b5-6-01/homeready-mortgage-loan-and-borrower-eligibility)

_General information, not financial advice._