HomeReady Changes Are Coming!
Fannie Mae is committed to offering home finance options that meet market needs while maintaining sustainable credit standards that do not place undue risk on borrowers. To fulfill these objectives, Fannie Mae must balance several goals and mandates, while meeting affordable housing goals.
In a recent statement, Fannie Mae said, “We are a leading provider of liquidity to the housing finance industry, who always works to improve the efficiency of the mortgage market and continue to provide access to mortgage financing in all markets.”
Changes to HomeReady Income Limits
Thus, Fannie Mae has announced that it will make changes to HomeReady Income Limits, which will apply to new loan casefiles submitted to DU on and after July 20, 2019, and to the DU eligibility assessment, which will result in certain new loan casefiles submitted to DU on or after July 20, 2019 receiving an “Ineligible” recommendation when multiple high-risk factors are present.
HomeReady Income Limits
To be eligible for a HomeReady loan, a borrowers’ total annual qualifying income may not exceed 100% of the area median income (AMI) for the property’s location and there is no income limit for properties located in low-income census tracts (those where the median income is not greater than 80% AMI). Fannie Mae believes that to better align with its housing goals, they are changing the income limit requirements for all HomeReady loans to not exceed 80% AMI for the property’s location. (This includes properties in low-income census tracts.)
- All the above changes will apply to new loan casefiles submitted to DU the weekend of July 20, 2019.
- The new limits and the 80% AMI change will apply to manually underwritten loans with application dates on or after July 20, 2019.
HomeReady is getting harder to qualify for and you must be at 80% of the AMI and the AUS approvals are going to get a little bit tougher.