Conventional Home Ready & Home Possible Mortgages
- Minimum loan amount $50,000, Maximum loan amount $726,200.
- 3% down payment required, the down payment can be from the buyer(s) own funds, from a qualified retirement program, gifted from a relative, or gifted from a federally approved down payment assistance program. 660 middle credit score is required for federally approved down payment assistance program and maximum income requirements must be met.
- Minimum middle credit score 660 a regular stick-built home. Mobile Homes aren’t currently eligible for a Conventional Home Ready & Home Possible mortgage.
- Repair and remodel loans aren’t available.
- The home must be in a qualified area, income restrictions apply for all counties currently the maximum household income is 80% of the median income for the county, currently $59,200. There are exceptions to the maximum income, if the home is located in an underserved area there is no maximum income.
- Income requirements- The buyer(s) must provide a 2-year history, the buyers can’t have more than 3 employers in the past 2 years. Enrollment in a secondary or primary school program counts towards the 2- year history. A gap in employment of more than 60 days usually isn’t accepted unless there are documented reason(s).
- Hourly or salaried employees if they are starting with a new employer must have been on the job for a minimum of 30 days prior to closing, the only exceptions are if the employee is transferring locations with the same employer, or if the employee has a signed offer letter from the new employer. 30 days consecutive pay stubs and the last 2 years W2’s and tax returns are required. Averaging of income over a 2-year period is not a requirement.
- W2 employees that receive more than 20% of their annual income as commissions, or bonuses must supply federal tax returns, and any employment related deductions will be counted against current income.
- If the buyer(s) own more than 20% of a business that files a separate return, the last 2 consecutive returns for the business must be provided.
- Self-employed buyers must have 2 consecutive years of federal tax returns proving the self-employment. A year-to-date profit & loss statement must be provided and if the P & L income is less than the average of the tax returns the lowest income will be used.
- Self-employed buyers with credit score above 740 may be allowed to only supply 1 year of self-employed tax returns, 2-year(s) proof of the business entity is required, the automated underwriting system must indicate that only 1 year tax returns are required.
