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This website discusses mortgage programs and how to qualify. Your eligibility may vary based on lender guidelines and investor overlays. Check with your lender for specific details.
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This article was checked for accuracy as of June 30, 2025. Learn more about our commitments to accuracy and your mortgage education in our editorial guidelines.
Updated: June 30, 2025
This guide to HomeReady vs Home Possible compares two popular conventional mortgages designed for low- to moderate-income home buyers.
Fannie Mae HomeReady and Freddie Mac Home Possible mortgages cater to a similar market segment, and both are popular among first-time home buyers. However, distinct features and requirements set them apart.
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:
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:
Both mortgages are affordable programs, catering to slightly different home buyer profiles.
| Loan Feature | HomeReady | Home Possible |
| Minimum Loan Size Allowed | None | None |
| Maximum Loan Size Allowed | See Loan Limits | See Loan Limits |
| Maximum Household Income Allowed | 80% of AMI | 80% of AMI |
| Minimum Credit Score Required | 620 | 660 |
| Debt-to-Income Maximum - Standard | 50.00% | 50.00% |
| Debt-to-Income Maximum with Compensating Factors | 50.00% | 50.00% |
| Minimum Downpayment Required | 3.00% | 3.00% |
| Maximum Loan-To-Value Allowed | 97.00% | 97.00% |
| Maximum Combined Loan-to-Value Allowed | 105% | 105% |
| First-Time Homebuyer Education Required | Yes | Yes |
| Minimum Age Allowed | Minimum Legal Age | Minimum Legal Age |
| Maximum Age Allowed | None | None |
| First-Time Home Buyers Allowed | Yes | Yes |
| First-Time Home Buyers Only | No | No |
| Low-Down Payment Mortgage Classification | Yes | Yes |
| Income Verification Required | Yes | Yes |
| Military Service Required | No | No |
| States Allowed | All States | All States |
| Homeowners Insurance Required | Yes | Yes |
| Escrow Taxes & Insurance Required | Recommended | Recommended |
| Loan Feature | HomeReady | Home Possible |
| Average Interest Rate: Last Year | Not Tracked | Not Tracked |
| Average Loan Size: Last Year | Not Tracked | Not Tracked |
| Average Approval Rate: Last Year | Not Tracked | Not Tracked |
| Market Share: Last Year | Not Tracked | Not Tracked |
| Purchase Mortgages Originated: Last Year | Not Tracked | Not Tracked |
| Loan Feature | HomeReady | Home Possible |
| 1-Year ARM Available | No | No |
| 5-Year ARM Available | Yes | Yes |
| 10-Year Fixed-Rate Mortgage Available | Yes | Yes |
| 15-Year Fixed-Rate Mortgage Available | Yes | Yes |
| 20-Year Fixed-Rate Mortgage Available | Yes | Yes |
| 25-Year Fixed-Rate Mortgage Available | No | Yes |
| 30-Year Fixed-Rate Mortgage Available | Yes | Yes |
| Temporary Buydowns Available | Yes | Yes |
| Loan Feature | HomeReady | Home Possible |
| Funding Fee / Guarantee Fee | No | No |
| Upfront Mortgage Insurance Premium | No | No |
| Annual Mortgage Insurance Premium | No | No |
| Private Mortgage Insurance | Yes | Yes |
| Loan Feature | HomeReady | Home Possible |
| Primary Residence | Yes | Yes |
| Second Home | No | No |
| Vacation Home | No | No |
| Investment Property | No | No |
| Non-Occupant Co-Borrower | Yes | Yes |
| Loan Feature | HomeReady | Home Possible |
| U.S. Citizen Allowed | Yes | Yes |
| Permanent Resident Alien Allowed | Yes | Yes |
| Non-Permanent Resident Alien Allowed | Yes | Yes |
| Foreign National Allowed | Yes | Yes |
| Buyers With Diplomatic Immunity Allowed | Yes | Yes |
| Loan Feature | HomeReady | Home Possible |
| Credit Scoring Model | Tri-merge | Tri-merge |
| Non-Traditional Credit References Allowed | Yes | Yes |
| Deferred Student Loans | Lesser of 5% of balance or monthly payment | Lesser of 5% of balance or monthly payment |
| Deferred Debt Calculation | Lesser of 5% of balance or monthly payment | Lesser of 5% of balance or monthly payment |
| Pay Off Medical Collections Prior To Closing | No | No |
| Pay Off Non-Medical Collections Prior To Closing | No | No |
| Bankruptcy, Chapter 7 | 4-year waiting period | 4-year waiting period |
| Bankruptcy, Chapter 13 | 4-year waiting period | 4-Year waiting period |
| Short Sale | 4-year waiting period | 4-year waiting period |
| Foreclosure | 7-year waiting period | 7-year waiting period |
| Judgments & Liens Allowed | Must be satisfied | Must be satisfied |
| Federal Income Tax Delinquency Allowed | Must be satisfied | Must be satisfied |
| Loan Feature | HomeReady | Home Possible |
| Minimum Square Footage Allowed | No minimum | No minimum |
| Maximum Square Footage Allowed | No maximum | No maximum |
| Single-Family Residences Allowed | Yes | Yes |
| Condominiums Allowed | Yes | Yes |
| Non-Warrantable Condominiums Allowed | No | No |
| Co-ops Allowed | No | No |
| Townhomes Allowed | Yes | Yes |
| 2-4 Unit Homes Allowed | Yes | Yes |
| Manufactured Homes Allowed | Yes | Yes |
| Fraternity and Sorority Houses Allowed | No | No |
| Tiny Homes Allowed | Yes | No |
| Modular Homes Allowed | Yes | Yes |
| Cob Homes Allowed | Yes | No |
| Shipping Container Homes Allowed | Yes | Yes |
| Condotels Allowed | No | No |
| Bed & Breakfast Allowed | Yes | No |
| Working Farms Allowed | Yes | No |
| Working Ranches Allowed | Yes | No |
| Houseboats Allowed | No | No |
| Log Homes Allowed | Yes | No |
| Geodesic Homes Allowed | Yes | No |
| Timeshares Allowed | No | No |
| Homes with Solar Panels Allowed | Yes | Yes |
| 3-D Printed Homes Allowed | Yes | No |
| Leasehold Estates Allowed | Yes | Yes |
| Mixed-Use Properties Allowed | Yes | No |
| Flood Zones Allowed | Yes | Yes |
| Properties With More Than 20 Acres Allowed | Yes | No |
| Properties with PACE Allowed | Must be subordinated | No |
| Loan Feature | HomeReady | Home Possible |
| Inter Vivos Revocable Trust Allowed | Yes | Yes |
| Closing in a Corporation Allowed | No | No |
| Community Land Trust Allowed | Yes | Yes |
| Non-Profit Organizations Allowed | No | No |
| Municipal Government Agencies Allowed | No | No |
| Loan Feature | HomeReady | Home Possible |
| W-2 Income Allowed | Yes | Yes |
| Self-Employment Income Allowed | Yes | Yes |
| Investment Income Allowed | Yes | Yes |
| Retirement Income Allowed | Yes | Yes |
| Trust Income Allowed | Yes | Yes |
| Social Security Income Allowed | Yes | Yes |
| Military Income Allowed | Yes | Yes |
| Rental Income Allowed | Yes | Yes |
| Asset Depletion as Income Allowed | Yes | Yes |
| Offer Letter Income Allowed | Yes | Yes |
| Disability Income Allowed | Yes | Yes |
| Alimony and Child Support Income Allowed | Yes | Yes |
| Boarder Income Allowed | Yes | Yes |
| Accessory Dwelling Unit Income Allowed | Yes | No |
| Cannabis Industry Income Allowed | Yes | No |
| Automobile Allowance as Income Allowed | Yes | Yes |
| Housing Allowance as Income Allowed | Yes | Yes |
| Temporary Leave Income Allowed | Yes | Yes |
| Bank Statements as Income Allowed | No | Yes |
| Debts Paid By Others as Income Allowed | Yes | Yes |
| Loan Feature | HomeReady | Home Possible |
| Seasoning Requirements | 60 days | 60 days |
| Reserves Required | No | No |
| Cash Gift For Downpayment Allowed | No | No |
| Seller Concessions, Maximum | 3.00% | 3.00% |
| Salary Advance for Downpayment Allowed | No | No |
| Relocation Funds for Downpayment Allowed | Yes | Yes |
| Gift of Equity Allowed | Yes | Yes |
| Sweat Equity Allowed | Yes | Yes |
| Crypto for Downpayment Allowed | Yes | Yes |
| Cash Value For Credit Card Rewards Allowed | Yes | Yes |
| Cash Value For Airline Rewards Allowed | Yes | Yes |
| Loan Feature | HomeReady | Home Possible |
| Assumable Mortgage Allowed | No | No |
| Trailing Co-Borrower Allowed | Yes | Yes |
| Maximum Properties Financed Allowed | 2 | 2 |
| Flipped Homes Allowed | Yes | Yes |
| Arms-Length Transaction Required | No | No |
| Occupancy Deadline | 60 days | 60 days |
| Delayed Financing Allowed | Yes | Yes |
| Prepayment Penalty Allowed | No | No |
| Termite Inspection Required | No | No |
| Power of Attorney Allowed | Yes | yes |
| Repair Allowances Allowed | Yes | Yes |
| Gifts From Charitable Organizations Allowed | No | No |
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. Additionally, 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 HomeReady 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.
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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, compare lenders at Homebuyer.com.
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