Home Ready Mortgages

In the U.S., countless borrowers secure mortgages every day, often through programs like HomeReady. Conventional mortgages are among the most common types of home loans, adhering to traditional credit and lending standards set by entities such as Fannie Mae and Freddie Mac.

You might already have a conventional mortgage without even realizing it, as many loans are purchased by Fannie Mae. Fannie Mae offers several mortgage financing options, including the HomeReady program—a solution designed to make homeownership more affordable. New Century Mortgage is proud to offer HomeReady as part of its range of accessible mortgage options.

Here’s a closer look at Fannie Mae and how the HomeReady program could be a great choice for your next home purchase or refinance.

Fannie Mae: An Overview

Fannie Mae, officially known as the Federal National Mortgage Association, was established by Congress in 1938 to enhance liquidity in the housing and mortgage markets by buying loans from banks and other lenders. Its main competitor, Freddie Mac, was created to rival Fannie Mae’s market presence.

Both Fannie Mae and Freddie Mac buy loans and bundle them into mortgage-backed securities, which are then sold to investors. In late 2008, during the financial crisis, both entities were placed under conservatorship by the Federal Housing Finance Agency (FHFA). Since then, Fannie Mae has rebounded, contributing to the growth and recovery of the housing market. This resurgence was partly driven by increased demand for affordable lending options, leading to the introduction of the HomeReady program.

Home Ready Mortgage Program: Affordable and Flexible

The HomeReady program is designed to be a flexible and affordable option for creditworthy, low-income borrowers who are looking to buy a new home or refinance an existing mortgage.

Key Benefits of HomeReady:

• Lower Down Payments:HomeReady allows borrowers to put down less than the standard conventional mortgage requirement, and it has a lower down payment than the FHA’s minimum requirement.
• Down Payment Assistance:Borrowers can combine HomeReady with various down payment assistance programs. These funds can come from multiple sources, including personal gifts or seller contributions, further reducing the cost of purchasing a home.
• Reduced Mortgage Insurance Costs:For loans that require private mortgage insurance (PMI), HomeReady offers reduced coverage, leading to lower monthly premiums. PMI can also be canceled once certain conditions are met.

HomeReady is not just for first-time homebuyers; it’s also available to repeat homeowners. Those with higher credit scores might find HomeReady offers more favorable pricing compared to other conventional options.

Get Started with HomeReady

If you’re interested in learning more about Fannie Mae’s HomeReady program, New Century Mortgage is here to answer all your questions and help you explore this affordable lending solution for your next home purchase or refinance.