Short answer
HomeReady is a Fannie Mae conventional loan with extra flexibility for buyers whose income is at or below 80 percent of the area median income (AMI) where the home is. It can be used to buy or do a limited cash-out refinance of a 1 to 4 unit home you'll live in, including condos and manufactured homes. If every buyer is a first-time homebuyer, a homeownership education course is required. You don't have to be a first-time buyer to use it.
How does the income limit work?
The lender adds up the qualifying income of everyone signing the note and compares it with the AMI that Fannie Mae publishes for the home's location. If the total is at or below 80 percent of that figure, the loan can be HomeReady. Because AMI differs by area, the same income can qualify in one New Hampshire town and not another. Fannie Mae's automated system will flag when a file looks eligible.
What's different about HomeReady?
- Mortgage insurance coverage can be lower than on a standard conventional loan, which may lower the monthly payment.
- Gifts, grants and other help can be used toward your costs, with program rules.
- Boarder income can count in some cases; see can a roommate's rent help you qualify.
- Non-occupant co-borrowers are allowed.
- Completing housing counseling before closing may earn a pricing credit.
Where do I take the required course?
When every borrower is a first-time buyer, one of the borrowers needs to complete homeownership education before closing. See where to take a homebuyer class in NH and who counts as a first-time buyer.
How does it compare with NH Housing and FHA?
NH Housing programs can add down payment and closing cost help for eligible buyers, and FHA has flexible credit guidelines. Freddie Mac's Home Possible is a similar conventional option. The best fit depends on your income, credit and savings, so Tom compares them side by side. See compare loan programs and the NH Housing guide.
Sources
- Fannie Mae Selling Guide B5-6-01, HomeReady Mortgage Loan and Borrower Eligibility
- Fannie Mae Selling Guide B5-6-02, HomeReady Mortgage Underwriting Methods and Requirements
Checked November 2, 2026. Rules and dates change, so confirm current details before you rely on them.
General information only, not tax or legal advice. Program availability, eligibility and terms vary by lender and are subject to change and to underwriting approval. Not a commitment to lend.