Fannie Mae and Freddie Mac, the two major agencies for many mortgage borrowers, have their own programs tailored to first-time homebuyers and/or those will low down payments.

Fannie Mae HomeReady Loan

Borrowers qualified for a Fannie Mae HomeReady mortgage can purchase a home with as little as a 3% down payment. The HomeReady program requires that borrowers earn no more than 80% of the area median income (AMI). To check your local income limit, use Fannie Mae’s lookup tool.

Mortgage insurance is required when the loan amount is MORE than 80% of the purchase price (practical translation: down payment is less than 20%). Also, the lower the down payment, the higher the premium ratio charged.

HomeReady borrowers can be eligible for lower interest rates and lower mortgage insurance premiums compared to other conventional loan programs.

Freddie Mac Home Possible Loan

Like the HomeReady program, Home Possible borrowers may purchase for as little as a 3% down payment and has the same income limits

While the Home Possible program has a higher minimum credit score, a buyer with limited or no credit may still be eligible.

Both the HomeReady and Home Possible programs require the borrower to complete a Homebuyer Education course if all borrowers on the loan are first-time homebuyers.

Talk to your loan officer at Cinch Home Loans about the best situation for you.