Home Possible

The Home Possible is a Fannie Mae program designed to expand homeownership opportunities for creditworthy borrowers with moderate income.

Eligibility:

Income Limits: Your income cannot exceed a specific percentage (typically 80%) of the Area Median Income (AMI) for the location of the property you wish to purchase.
Credit Score: Minimum credit score requirements vary, but can be as low as 620 with a slightly higher rate.
Debt-to-Income Ratio: A healthy debt-to-income ratio is preferred, though flexibility may exist compared to conventional loans.
Down Payment: A minimum down payment of 3% is required. Funds can come from various sources, including gifts and grants.
Property Type: Must be a primary residence (single-unit dwelling).

Benefits:

Lower Down Payment: Requires a smaller down payment compared to conventional loans.
Competitive Rates: Offers attractive interest rates due to reduced risk for lenders.
Flexible Qualifying Factors: Income limits and credit score requirements can be more lenient than traditional options.

Considerations:

Income Limits: You must meet the income restrictions for the area where you’re buying.
Property Usage: Limited to single-unit primary residences.
Geographic Restrictions: No geographic limitations on loan amounts, but income limits vary by location.