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Dan Green

Dan Green

Since 2003, Dan Green has been a leading mortgage lender and respected industry authority. His unwavering commitment to first-time home buyers and home buyer education has established him as a trusted voice among his colleagues, his peers, and the media. Dan founded Homebuyer.com to expand the American Dream of Homeownership to all who want it. .

Similar Homes - Homeready Vs Home Possible

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HomeReady vs Home Possible: Compare Side-by-Side

This guide to HomeReady vs Home Possible compares two popular conventional mortgages made for low- to moderate-income home buyers.

The Differences Between Fannie Mae HomeReady and Freddie Mac Home Possible Mortgages

Fannie Mae HomeReady and Freddie Mac Home Possible mortgages cater to a similar market segment, and both are popular among first-time home buyers. Distinct features and requirements set them apart.

Highlights: Fannie Mae HomeReady Mortgage

The HomeReady mortgage by Fannie Mae is tailored for low- to moderate-income borrowers. It stands out for low mortgage rates and reduced private mortgage insurance requirements.

Key features of the HomeReady mortgage include:

  • A minimum down payment of 3 percent
  • Income limits set at 80% of the area median income
  • 620 minimum credit score
  • Accepts co-borrower incomes, even if the co-borrower doesn’t reside in the home
  • Available for various property types, including single-family homes, condos, and townhouses

Highlights: Freddie Mac Home Possible Mortgage

The Freddie Mac Home Possible mortgage offers affordable homeownership opportunities to a broad spectrum of borrowers, including first-time home buyers with lower credit scores.

Notable features of the Home Possible mortgage include:

  • A minimum down payment of 3 percent
  • Income limits at 100% of the area median income, higher than HomeReady
  • 660 minimum credit score
  • Mandatory homeownership education for first-time home buyers
  • Available for single-family homes, condos, and multi-unit properties

Both mortgages are affordable mortgage programs, catering to a slightly different home buyer profile.

Mortgages At-A-Glance

Loan FeatureHomeReadyHome Possible
Minimum Loan Size AllowedNoneNone
Maximum Loan Size AllowedSee Loan LimitsSee Loan Limits
Maximum Household Income Allowed80% of AMI80% of AMI
Minimum Credit Score Required620660
Debt-to-Income Maximum - Standard50.00%50.00%
Debt-to-Income Maximum with Compensating Factors50.00%50.00%
Minimum Downpayment Required3.00%3.00%
Maximum Loan-To-Value Allowed97.00%97.00%
Maximum Combined Loan-to-Value Allowed1.051.05
First-Time Homebuyer Education RequiredYesYes
Minimum Age AllowedMinimum Legal AgeMinimum Legal Age
Maximum Age AllowedNoneNone
First-Time Home Buyers AllowedYesYes
First-Time Home Buyers OnlyNoNo
Low-Down Payment Mortgage ClassificationYesYes
Income Verification RequiredYesYes
Military Service RequiredNoNo
States AllowedAll StatesAll States
Homeowners Insurance RequiredYesYes
Escrow Taxes & Insurance RequiredRecommendedRecommended

Compare Mortgage Statistics

Loan FeatureHomeReadyHome Possible
Average Interest Rate: Last YearNot TrackedNot Tracked
Average Loan Size: Last YearNot TrackedNot Tracked
Average Approval Rate: Last YearNot TrackedNot Tracked
Market Share: Last YearNot TrackedNot Tracked
Purchase Mortgages Originated: Last YearNot TrackedNot Tracked

Compare Mortgage Products

Loan FeatureHomeReadyHome Possible
1-Year ARM AvailableNoNo
5-Year ARM AvailableYesYes
10-Year Fixed-Rate Mortgage AvailableYesYes
15-Year Fixed-Rate Mortgage AvailableYesYes
20-Year Fixed-Rate Mortgage AvailableYesYes
25-Year Fixed-Rate Mortgage AvailableNoYes
30-Year Fixed-Rate Mortgage AvailableYesYes
Temporary Buydowns AvailableYesYes

Compare Mortgage Insurance

Loan FeatureHomeReadyHome Possible
Funding Fee / Guarantee FeeNoNo
Upfront Mortgage Insurance PremiumNoNo
Annual Mortgage Insurance PremiumNoNo
Private Mortgage InsuranceYesYes

Compare Occupancy Rules

Loan FeatureHomeReadyHome Possible
Primary ResidenceYesYes
Second HomeNoNo
Vacation HomeNoNo
Investment PropertyNoNo
Non-Occupant Co-BorrowerYesYes

Compare Citizenship Rules

Loan FeatureHomeReadyHome Possible
U.S. Citizen AllowedYesYes
Permanent Resident Alien AllowedYesYes
Non-Permanent Resident Alien AllowedYesYes
Foreign National AllowedYesYes
Buyers With Diplomatic Immunity AllowedYesYes

Compare Credit Rules

Loan FeatureHomeReadyHome Possible
Credit Scoring ModelTri-mergeTri-merge
Non-Traditional Credit References AllowedYesYes
Deferred Student LoansLesser of 5% of balance or monthly paymentLesser of 5% of balance or monthly payment
Deferred Debt CalculationLesser of 5% of balance or monthly paymentLesser of 5% of balance or monthly payment
Pay Off Medical Collections Prior To ClosingNoNo
Pay Off Non-Medical Collections Prior To ClosingNoNo
Bankruptcy, Chapter 74-year waiting period4-year waiting period
Bankruptcy, Chapter 134-year waiting period4-Year waiting period
Short Sale4-year waiting period4-year waiting period
Foreclosure7-year waiting period7-year waiting period
Judgments & Liens AllowedMust be satisfiedMust be satisfied
Federal Income Tax Delinquency AllowedMust be satisfiedMust be satisfied

Compare Property Rules

Loan FeatureHomeReadyHome Possible
Minimum Square Footage AllowedNo minimumNo minimum
Maximum Square Footage AllowedNo maximumNo maximum
Single-Family Residences AllowedYesYes
Condominiums AllowedYesYes
Non-Warrantable Condominiums AllowedNoNo
Co-ops AllowedNoNo
Townhomes AllowedYesYes
2-4 Unit Homes AllowedYesYes
Manufactured Homes AllowedYesYes
Fraternity and Sorority Houses AllowedNoNo
Tiny Homes AllowedYesNo
Modular Homes AllowedYesYes
Cob Homes AllowedYesNo
Shipping Container Homes AllowedYesYes
Condotels AllowedNoNo
Bed & Breakfast AllowedYesNo
Working Farms AllowedYesNo
Working Ranches AllowedYesNo
Houseboats AllowedNoNo
Log Homes AllowedYesNo
Geodesic Homes AllowedYesNo
Timeshares AllowedNoNo
Homes with Solar Panels AllowedYesYes
3-D Printed Homes AllowedYesNo
Leasehold Estates AllowedYesYes
Mixed-Use Properties AllowedYesNo
Flood Zones AllowedYesYes
Properties With More Than 20 Acres AllowedYesNo
Properties with PACE AllowedMust be subordinatedNo

Compare Ownership Rules

Loan FeatureHomeReadyHome Possible
Inter Vivos Revocable Trust AllowedYesYes
Closing in a Corporation AllowedNoNo
Community Land Trust AllowedYesYes
Non-Profit Organizations AllowedNoNo
Municipal Government Agencies AllowedNoNo

Compare Income Rules

Loan FeatureHomeReadyHome Possible
W-2 Income AllowedYesYes
Self-Employment Income AllowedYesYes
Investment Income AllowedYesYes
Retirement Income AllowedYesYes
Trust Income AllowedYesYes
Social Security Income AllowedYesYes
Military Income AllowedYesYes
Rental Income AllowedYesYes
Asset Depletion as Income AllowedYesYes
Offer Letter Income AllowedYesYes
Disability Income AllowedYesYes
Alimony and Child Support Income AllowedYesYes
Boarder Income AllowedYesYes
Accessory Dwelling Unit Income AllowedYesNo
Cannabis Industry Income AllowedYesNo
Automobile Allowance as Income AllowedYesYes
Housing Allowance as Income AllowedYesYes
Temporary Leave Income AllowedYesYes
Bank Statements as Income AllowedNoYes
Debts Paid By Others as Income AllowedYesYes

Compare Assets & Downpayment Rules

Loan FeatureHomeReadyHome Possible
Seasoning Requirements60 days60 days
Reserves RequiredNoNo
Cash Gift For Downpayment AllowedNoNo
Seller Concessions, Maximum3.00%3.00%
Salary Advance for Downpayment AllowedNoNo
Relocation Funds for Downpayment AllowedYesYes
Gift of Equity AllowedYesYes
Sweat Equity AllowedYesYes
Crypto for Downpayment AllowedYesYes
Cash Value For Credit Card Rewards AllowedYesYes
Cash Value For Airline Rewards AllowedYesYes

Compare Loan Traits

Loan FeatureHomeReadyHome Possible
Assumable Mortgage AllowedNoNo
Trailing Co-Borrower AllowedYesYes
Maximum Properties Financed Allowed22
Flipped Homes AllowedYesYes
Arms-Length Transaction RequiredNoNo
Occupancy Deadline60 days60 days
Delayed Financing AllowedYesYes
Prepayment Penalty AllowedNoNo
Termite Inspection RequiredNoNo
Power of Attorney AllowedYesyes
Repair Allowances AllowedYesYes
Gifts From Charitable Organizations AllowedNoNo
Sources: FHFA

Important Notice For Home Buyers

This mortgage comparison information is based on published Federal Housing Finance Agency mortgage guidelines. 

Mortgage guidelines for the HomeReady and Home Possible mortgage programs are subject to change without notice. Furthermore, individual mortgage lenders may have their own variation of these guidelines, called lender overlays, which could affect your mortgage approval process. 

If a mortgage lender denies your Home Ready or Home Possible mortgage application, it does not necessarily mean all mortgage lenders will deny it. Different mortgage companies enforce different standards, and getting approved with another lender may be possible. 

Apply for a mortgage with Homebuyer.com here.

Find Out More: HomeReady vs Home Possible Mortgages

Eager to learn more and make an informed decision? Dive into the details by visiting our comprehensive Fannie Mae HomeReady and Freddie Mac Home Possible guides. And when you’re ready to move forward, start your mortgage pre-approval at Homebuyer.com. 

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       This guide to HomeReady vs Home Possible compares two popular conventional mortgages made for low- to moderate-income home buyers.

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