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Buckeye AZ HomeReady loan program, What is it and who does them

September 11th, 2019 2:40 PM by Nathan Rufty

The HomeReady™ Mortgage in Buckeye AZ (HomeReady) program helps lenders serve today’s market of creditworthy, low- and moderate-income (LMI) borrowers, and encourages the financing of homes in designated low-income, minority,15 and disaster-impacted communities. HomeReady offers high loan-to-value (LTV) ratio financing to help homebuyers who would otherwise qualify for a mortgage but may not have the resources for a larger down payment. HomeReady mortgages offer low rates, minimal risk-based price adjustments compared to other programs, and reduced mortgage insurance costs. 

Buckeye AZ borrower income must be below 100% of the area median income (AMI), with some exceptions based on the property’s location. There is no income limit on properties in low-income
census tracts.

HomeReady allows for nontraditional credit. Credit scores as low as 620 are permitted. This limit is revised annually. For manual underwriting, there is a minimum credit score of 660 for one-unit properties and a credit score minimum of 680 for two- to four-unit properties. Risk-based pricing is waived in some instances based on credit score. Fannie Mae also uses trended data in its credit risk assessment including those loans submitted through Desktop Underwriter®. Trended credit data provides expanded information on a borrower’s revolving account credit history including whether the borrower pays off the balance each month or makes the minimum payment due, and whether the borrower exceeds the credit limit.  

The HomeReady™ Mortgage program may allow community banks to expand their customer base by serving more low- and moderate-income borrowers, low- and moderate-income census tracts, high-minority census tracts, and designated disaster areas. HomeReady may help community banks access the secondary market, providing greater liquidity to enhance their lending volume. Loans originated through HomeReady may receive favor able consideration under the CRA because the program is targeted for use in LMI communities or by LMI borrowers.

Buckeye AZ HomeReady Loan Program Benefits

  • Low down payment options; up to 97% of your mortgage can be financed
  • No minimum borrower contributions; this allows you to use qualified grants, monetary gifts, and more for your down payment, and closing funds
  • No first-time homebuyer requirement; even if you’ve owned a home in the past, you may still qualify
  • No income limits for properties in low income census tracts, 100% of average median income (AMI) in high minority census tracts, and 80% of AMI in all other properties
  • Rental income can be considered for qualifying for the loan

Buckeye AZ HomeReady loan program Criteria
  • Loan limits: FHFA publishes Fannie Mae’s conforming loan limits annually. See Resources for a link to the current limits.
  • Loan-to-value limits: Up to 97% LTV allowed. Use of Desktop Underwriter® is required for LTVs greater than 95%.
  • Adjustable-rate mortgages: The following ARMs are allowed: 5/1 with 2/2/5 caps only, and 7/1 and 10/1 with caps that vary according to Fannie Mae’s standard ARM matrix.
  • Down payment sources: Allowable sources include gifts, grants, Community Seconds®,16 and cash on hand. There is no minimum requirement from the borrower’s own funds.
  • Homeownership counseling: Comprehensive homeownership education is required for all borrowers through an online course provided by Framework®, a HUD-approved social enterprise run by the 
  • Housing Partnership Network. Borrowers will invest four to six hours (average) of their time and a fee of $75 (paid to Framework®) to learn the fundamentals of buying and owning a home, take an online test, and receive a certificate of completion. To promote further sustainability, borrowers will have access to post-purchase homeownership support for the life of the loan through Framework’s® homeownership advisor service. Alternatively, some borrowers can meet the education requirement by attending customized one-on-one counseling by a HUD-approved counseling agency.
  • Lenders can receive a $500 loan-level price adjustment credit where HomeReady borrowers have attended approved counseling services before entering into a sales contract. See How to Fulfill the Homeownership Education Requirement for HomeReady® Mortgage in Resources for more details. 
  • Loan-level price adjustments: Loan-level price adjustments are risk-based pricing adjustments that apply at the time of delivery only. Standard risk-based pricing is waived for HomeReady loans with LTVs less than 80% and a credit score of 680 or greater. A risk based, loan-level price adjustment cap of 150 basis points applies for loans outside of these parameters.
  • Mortgage insurance: HomeReady features a reduced mortgage insurance coverage requirement for loans above 90% LTV. Mortgage insurance is cancellable.



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