Affordable programs

Income limits may open better options.

Fannie Mae and Freddie Mac both offer affordable conventional mortgage options. These programs can make buying or refinancing more attainable through benefits such as reduced mortgage pricing, lower-rate opportunities, smaller down-payment requirements, or reduced mortgage-insurance costs. Many programs compare qualifying income with the area median income for the property’s location, so the AMI lookup helps identify benefits that may be available when income falls within the applicable limit.

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What it is.

Conventional mortgage options designed to make homeownership more affordable through low down payments, reduced pricing, and reduced PMI for eligible borrowers. Options include Fannie Mae’s HomeReady and Freddie Mac’s Home Possible, which allow as little as 3% down—even for eligible repeat homebuyers.

Quick numbers.

Occupancy: Primary residence for the HomeReady and Home Possible options below. Second homes and investment properties are not eligible for these programs.

LTV at a glance — Affordable Programs
TransactionEligible 1-unit exampleDown payment / equity
PurchaseUp to 97% LTVAs little as 3% down
Limited / no-cash-out refinanceUp to 97% LTV on eligible optionsAs little as 3% equity
Cash-out refinanceNot available through HomeReady / Home PossibleCompare a different loan program

97% is an eligible one-unit scenario, not a universal limit. Income limits, underwriting, loan type, and property requirements apply. HomeReady refinances above 95% require the existing loan to be owned or securitized by Fannie Mae. Manufactured homes, multi-unit homes, ARMs, or manual underwriting may have lower limits. Closing costs and reserves are additional.

HomeReady requirements · Home Possible requirements

Who it’s for.

At or below 80% of area median income (AMI): HomeReady and Home Possible are available to eligible first-time and repeat homebuyers purchasing a primary residence. Eligible primary-residence refinances may also qualify.

Above 80% and up to 100% AMI: Eligible buyers with at least one first-time homebuyer may qualify for reduced conventional pricing. The pricing threshold rises to 120% AMI in designated high-cost areas. Separate standard 3%-down purchase options require at least one first-time homebuyer; the income thresholds here apply to pricing benefits.

Check the AMI for the exact property address using the lookup below. We will help match your qualifying income and purchase plans to the available options.

Pros and cons.

Pros

  • Income too high? You may qualify using one borrower’s income or regular pay without commission, overtime, or bonuses. List all your income on the application, and let us figure out the best combination to proceed.
  • Down payments as low as 3% on eligible purchases.
  • Reduced pricing and rates if you qualify.
  • Reduced PMI costs on eligible HomeReady and Home Possible loans.
  • Eligible gift funds can help cover the down payment and closing costs.

Cons & considerations

  • Income, occupancy, and property requirements limit eligibility.
  • A smaller down payment can mean a larger loan balance, PMI, and a higher monthly payment.
  • HomeReady and Home Possible limit occupying borrowers to one other financed residential property in addition to the home being financed.
  • Homebuyer education is required. We will send you a link to obtain your certificate during the process.

Program details: Fannie Mae HomeReady · Fannie Mae pricing eligibility · Freddie Mac Home Possible · HomeReady eligibility FAQs

Official Fannie Mae Tool

Check the income limit for a property.

Enter the property address in Fannie Mae’s Area Median Income Lookup Tool. This will show you the AMI limits for the specific home you’re interested in.

Open the AMI Lookup Tool
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A little clarity. Better comparisons.

Understand income limits and qualifying income before comparing scenarios in Explore Rates, Mortgage Calculators, or your rate dashboard.

Understand income limits and eligibility

Eligibility and benefits depend on the loan program, borrower income, occupancy, property, and current guidelines.

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