What are the HomeReady income limits? Fannie Mae’s Selling Guide says the total annual qualifying income on a HomeReady mortgage may not exceed 80% of the area median income, or AMI, for the property’s location. It’s a comparison, not a fixed dollar amount.
The dollar figure depends on where the home is. So there’s no single number to memorize. Fannie Mae points lenders to its own AMI figures, and the guide says those are the figures a lender uses.
The practical question for a buyer is narrower. Does the income on the loan, counted the way the guide counts it, fall under the figure for the home’s location? A loan officer can check that against your file.
What Is a HomeReady Mortgage?
HomeReady is a conventional mortgage. Fannie Mae’s Selling Guide on HomeReady eligibility describes it as offering underwriting flexibilities to qualified borrowers who meet specific income criteria. The guide is written for lenders, so read it as general information rather than an offer.
The guide’s Overview puts it this way: “The HomeReady mortgage is a conventional community lending mortgage that offers underwriting flexibilities to qualified borrowers who meet specific income criteria.” That’s the guide’s own summary.
That language is written for lenders, not as terms for one borrower. A loan officer can say how it applies to a specific loan.
What Is the HomeReady Income Limit?
Fannie Mae’s guide compares a borrower’s income with the area median income for the property’s location. The total annual qualifying income may not exceed 80% of that figure. So the limit moves with the location of the home, not with the buyer’s hometown.
The wording is specific. The guide says: “To be eligible as a HomeReady mortgage, the total annual qualifying income may not exceed 80% of the AMI” for the property’s location.
AMI stands for area median income, which is the guide’s own term. The guide names no dollar figure, so the figure for a given home has to be looked up. Change the address, and the figure that applies can change with it.
Buyers weighing help with the down payment can also read about stacking down payment assistance with your mortgage.
Whose Income Counts Toward the HomeReady Limit?
The guide tells the lender to count the income of every borrower who will sign the note, to the extent that income is considered in evaluating creditworthiness for the loan. So the comparison covers every borrower on the loan, not one earner’s pay. Two borrowers mean two incomes in that math.
In the guide’s words, “the lender must count the income from all borrowers who will sign the note”. The guide limits that to income considered in evaluating creditworthiness for the loan.
How each borrower’s income would be figured is a file-by-file question. A loan officer can say how yours would be treated for a specific loan. Bring everyone who would sign, and what each one earns.
Where Do You Find the HomeReady Income Limit for Your Area?
The figure depends on the property’s location. Fannie Mae’s HomeReady product page links an Area Median Income Lookup Tool for checking income eligibility. The guide also says which figures count: the ones Fannie Mae uses in its own underwriting software or on its website.
Under that rule, lenders may not rely on other published versions of the area median income. So a figure from an unofficial table is worth confirming with a loan officer. Where the number came from matters as much as the number.
The product page describes the tool as an interactive map to “quickly identify income eligibility by area, property address, or Federal Information Processing Standards (FIPS) code.” Those are all ways of pointing at a location.
Is HomeReady Only for First-Time Buyers?
No. Fannie Mae’s product page says the ideal borrowers may be first-time or repeat homebuyers. The guide adds an education requirement that applies when every occupying borrower is a first-time buyer. So repeat buyers aren’t ruled out by that language, and the education requirement turns on the occupying borrowers.
The product page’s own description covers both. It says “The ideal HomeReady borrowers may be first-time or repeat homebuyers”.
On education, the guide says “Homeownership education is required for HomeReady purchase loans when all occupying borrowers are first-time homebuyers.” A loan officer can say whether that requirement applies to a given loan.
Buyers wondering about that course can read more on whether you have to take a homebuyer education course.
Where Your Own Income Fits In
The guide’s rule compares income with the figure for the home’s location. So whether the borrowers land under it depends on two things: the income on the loan and where the home is. Bring both to a conversation with a loan officer instead of guessing from a number found elsewhere.
Fellowship’s mortgage process page describes what its team looks at: “We holistically assess income, debt-to-income ratio, credit score, employment trajectory, and property type to determine eligibility.” It adds: “Each loan program has different sets of eligibility guidelines.”
Fellowship’s home purchase page puts it this way: “Depending on your circumstances, one home loan may be better than another.” That’s why a question about your own income and a program’s limit is worth talking through with a loan officer.
Frequently Asked Questions About HomeReady Income Limits
What is the HomeReady income limit?
Fannie Mae’s Selling Guide says the total annual qualifying income on a HomeReady mortgage may not exceed 80% of the area median income for the property’s location. The guide gives no dollar figure, so the number behind that comparison depends on where the home sits.
Does HomeReady have income limits?
Yes. Fannie Mae’s guide compares the borrower’s income with the area median income for the property’s location, and that comparison is what the eligibility question turns on. How it works out on a particular file is a question for a loan officer, who can look at the income on your loan.
What are the HomeReady income limits for my area?
The figure depends on the property’s location. Fannie Mae’s product page links an Area Median Income Lookup Tool, and the guide says lenders use the area median incomes Fannie Mae uses rather than other published versions. Ask your loan officer which figure applies to the home you’re buying.
Does everyone’s income on the loan count toward the limit?
Fannie Mae’s guide says the lender counts the income from all borrowers who will sign the note, to the extent that income is considered in evaluating creditworthiness for the loan. How each borrower’s income would be figured on your file is a question for a loan officer.
Do you have to be a first-time buyer to use HomeReady?
No. Fannie Mae’s product page says the ideal borrowers may be first-time or repeat homebuyers. Whether HomeReady suits a particular purchase is a separate question, and a loan officer can walk through how the eligibility rules would apply to your loan.
Do you have to take a homebuyer education course with HomeReady?
Fannie Mae’s guide says homeownership education is required for HomeReady purchase loans when all occupying borrowers are first-time homebuyers. Whether it applies to a given loan turns on the occupying borrowers, and your loan officer can say how that reads for your file.
Questions to Bring to Your Loan Officer
The income limit is simplest to plan around when you ask before you shop. Bring questions instead of guesses. A loan officer can answer them against your own file, with the property in hand and every borrower’s income on the table.
- What’s the income limit for this property’s location, and which figure do you use?
- Whose income would count on my loan, and how would it be figured?
- Does HomeReady fit my purchase, or does another option fit better?
- Would homeownership education be required for my loan?
When you’re ready, you can talk with a Fellowship loan officer about your situation.
