Home Ready Loans

The time is NOW to meet the diverse needs of today’s buyers with HomeReady, Fannie Mae’s enhanced affordable lending product. Designed for creditworthy, low-to moderate-income borrowers, this program has expanded eligibility for financing homes in designated low-income, minority, and disaster-impacted communities. HomeReady provides expanded access to credit while supporting sustainable home-ownership. Colorado Mortgage is committed to bringing affordable home loans to help you get into your dream house.

Program Highlights:

  • Low down payment. Up to 97% financing for home purchase with a lot of borrower flexibility (1-unit property). Non-first time home buyers are OKAY!
    Flexible sources of funds can be used for the down payment and closing costs with no minimum contribution required from the borrower’s own funds (1-unit property).
  • Conventional home financing with the option to cancel monthly MI (per Servicing Guide policy); lower MI coverage requirement above 90% LTV supports competitive borrower payment.
  • Home-ownership education helps buyers get ready to buy a home and be prepared for the responsibilities of home-ownership.

 

Home Ready Vs. Home Possible

There are similarities between these two loan types, both are great options geared towards lower-income, lower-credit score borrowers looking to ascertain wealth through home ownership.

What is Home Ready?

Home Ready mortgages are a type of home loan that is financed through the Federal National Mortgage Association. A Home Ready Loan is designed to help borrowers with low to moderate income buy or refinance a home by lowering the the typical down payment and insurance outlines.

What is Home Possible?

The home possible mortgage program is a Freddie Mac program or Federal Home Loan Mortgage Corporation and helps to finance low to moderate income from home buyers with similar parallels as the Home Ready program. This type of loan will require a slightly higher minimum credit score to qualify.

Benefits of Home Ready and Home Possible

Both of these mortgages types offer lower down payments than other types of loans. This can greatly speed up your journey to home ownership. Having lower mortgage insurance requirements means increasing the access for low income buyers to get the home of their dreams in a manor that makes sense.

A smaller down payment means that you can eliminate the need to save for a larger down payment and still purchase the home that you want. Alternative credit can also be used to help you qualify.

This is preferred if your credit is not the best and you need to work to rebuild it.

These mortgages products have an added benefit of assistance for low income buyers. For example, you’re allowed to receive gifts from family or friends in the form of a down payment. This may not be as easy with other conventional mortgage types.

Now once you’ve paid down 20% of your home’s total value, you can cancel your mortgage insurance.

In conclusion, you can also use your Home Ready loan to refinance a current home loan. The caveat to this is you cannot cash out of your equity.

Qualifications For A HomeReady loan Denver Colorado

Three major requirements that you should be aware of are listed below:
– Your credit score should be withing the qualifying range. Income is less of an issue, the credit score plays a bigger role if it meets the minimum. The minimum score required is 660 while the Home Ready can take a score of 620. If you study other types of mortgages, the majority require a higher one than this. This option can help you secure the financing that you need with a not so perfect credit score. Alternative credit history can be used as a potential substitute to help abide in meeting the qualification. These are payments like rent, utilities and other variations of it. Ask your lender for more information.

– The next qualification is home ownership education courses. These courses are designed to help you with the financial ups and downs that come with owning a home. These are 4 – 6 hours of approved courses to help you attain positive home ownership education.
– The last qualification is that you must not own any additional residences in the country. This doesn’t mean you have to be a first time home-buyer.

 

Is the Home Ready And Home Possible Available For All Home Types?

Home Ready and Home Possible are available for single-family, 1-unit homes, with the exception that they can be applied toward a variety of home types. HomeReady allows you to purchase 2 – to 4-unit homes as long as one of these is your main residence.

Both loan types can be used for a planned unit development, condo, town home and more. Call Sierra Pacific Mortgage today to see which property types these can finance. If you’d like to learn more about the full requirements in detail, visit the Fannie Mae or Freddie Mac websites.

Want to own a home in 2022 with down payment assistance?

If you are going to buy a home, you’re probably going to need to put a down payment of some kind down on a home. This amount should be equal to a percentage of your home’s final purchase price.

The amount of the down payment depends on your chosen loan type that you will use to purchase the home and the home’s price tag.

You can qualify for a down payment assistance program making you eligible to receive a grant. You could alternatively qualify for a low to no-interest loan to cover your closing costs. This id ideal for those that don’t have cash available but can still afford a mortgage.

 

 


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Sierra Pacific Mortgage NMLS# 1788. Michael Shotnik NMLS: 218281, CO License: 100017466. Not licensed in Alaska or New York.  To check license status of mortgage loan originator, visit D.O.R.A. and NMLS consumer access.