RateBreak

Flexible Options for Affordable Homeownership

The 2-1 temporary buydown offer is funded by Rocket Mortgage. Clients will receive an effective rate reduction of 2% below the note rate in the first year and 1% below the note rate in the second year.

Offer only valid on HomeReady® or Home Possible® loans. Maximum loan amount of $350,000. Buydown funds may not be redeemed for cash or credit and are nontransferable. This offer cannot be retroactively applied to any loans in process or closed loans. Offer is subject to changes or cancellation at any time at the sole discretion of Rocket Mortgage. Additional restrictions/conditions may apply. This is not a commitment to lend.

What is the HomeReady Loan Program?

The HomeReady loan program, backed by Fannie Mae, is designed for creditworthy, low- to moderate-income buyers. HomeReady offers competitive interest rates and can be an ideal solution for buyers who are looking for a low down payment option but may not qualify for other conventional loans.

Key Features of HomeReady

• Low 3% Down Payment: HomeReady allows you to buy a home with as little as 3% down, making it easier for buyers to qualify and reducing the upfront costs of homeownership.
• Inclusive Income Guidelines: Buyers can include income from other household members, such as renters or boarders, to help qualify for the loan. This flexibility makes HomeReady particularly useful for multi-generational households or those who rely on multiple income streams.
• Reduced Private Mortgage Insurance (PMI): HomeReady offers reduced PMI rates compared to other low down payment options, which helps lower your monthly payment.
• Homeownership Education: Borrowers must complete a homeownership education course as part of the loan approval process. This requirement ensures that buyers understand the financial responsibilities of owning a home, improving their long-term success as homeowners.

Who is Eligible for HomeReady?

To qualify for HomeReady, borrowers must have incomes that do not exceed 80% of the AMI for the property’s location. HomeReady is designed to make homeownership possible for buyers who may not have high incomes or significant savings for a large down payment. While there are credit score requirements, HomeReady is flexible, and borrowers with scores in the mid-600s or higher may qualify.

What is the Home Possible Loan Program?

The Home Possible program, backed by Freddie Mac, shares similar goals with HomeReady but offers its own set of features designed to help low- and moderate-income borrowers. Home Possible also provides an affordable option for first-time buyers and those seeking to refinance into more favorable terms.

Key Features of Home Possible

• 3% Down Payment: Like HomeReady, Home Possible offers a low down payment option, allowing buyers to qualify with just 3% down.
• Flexible Credit Options: Home Possible has flexible credit guidelines, making it easier for buyers with lower credit scores to qualify. Borrowers with non-traditional credit histories can also be considered for the program.
• Multiple Income Sources: The Home Possible program allows buyers to use income from a variety of sources, including non-occupying co-borrowers, to help qualify. This flexibility ensures that even buyers with unique financial situations can take advantage of this program.
• Reduced Mortgage Insurance Costs: Like HomeReady, Home Possible offers reduced PMI rates, lowering the cost of monthly mortgage payments and making homeownership more affordable over time.

Who is Eligible for Home Possible?

Eligibility for the Home Possible program is also based on income, with a general focus on low- and moderate-income borrowers. As with HomeReady, the borrower’s income must not exceed 80% of the AMI for the area where the home is being purchased. However, Home Possible offers additional flexibility when it comes to credit requirements, making it an excellent choice for buyers who may not have perfect credit but are otherwise financially stable.

How to Choose Between HomeReady and Home Possible

Both loan programs offer similar benefits and are designed to make homeownership more attainable for low- to moderate-income buyers. However, there are subtle differences between the two programs:

• Income Flexibility: HomeReady may be the better choice for buyers relying on income from household members or non-traditional income streams to qualify. If you have renters or family members contributing to your monthly expenses, HomeReady can help you count that income toward your loan approval.
• Credit Flexibility: Home Possible tends to offer more lenient credit requirements, making it a great choice for buyers with lower credit scores or limited credit histories.
• Mortgage Insurance: Both programs offer reduced PMI rates, but the amount of PMI you’ll pay may vary slightly based on your loan terms and credit profile.

Ready to Get Started with HomeReady or Home Possible?

If you’re ready to explore your options for affordable homeownership, Flatwater Mortgage, LLC can help you decide whether HomeReady or Home Possible is right for you. Contact us today to learn more about these programs, determine your eligibility, and take the first step towards buying your home.