HomeReady® allows as little as 3% down on an eligible primary-residence purchase — so you can keep more cash in reserves while still getting conventional financing with cancellable PMI.
The headline number is 3% of the purchase price for many HomeReady purchase loans. Your actual cash to close also includes closing costs, prepaid items (taxes, insurance, interest), and any reserves your underwriting finding requires.
When LTV exceeds 95%, homebuyer education is typically required. Putting 5% or more can remove that education requirement and lower PMI cost — a tradeoff we model dollar-for-dollar.
Ryan and Steve also screen gift funds, seller credits, VLIP grants, and other DPA so your down payment strategy matches the rest of your file.
Illustrative down payment only — closing costs and prepaids are extra and vary by contract.
$7,500 down payment. Keeps cash light; expect PMI and likely homebuyer education over 95% LTV.
$12,500 down payment. Lower LTV can reduce PMI and may avoid the education trigger tied to higher LTVs.
Eligible donor gifts can cover the down payment and closing costs when gift letters and paper trails are complete.
Qualifying Indiana first-time buyers at or below 50% AMI may stack a VLIP credit to further cut cash to close.
HomeReady’s low down payment is only one lever — we usually stack several.
Seller credits & lender credits
Contract seller concessions and pricing credits can cover closing costs so more of your savings stay as reserves after funding.
Grants and DPA
VLIP, IHCDA, Chenoa, and Luminate Path may reduce upfront cash when overlays allow. We compare structures before you write an offer.
Related guides to plan your cash-to-close strategy.
Program overview — affordable conventional financing from Fannie Mae.
AMI, occupancy, and credit rules for approval.
Typical score minimums and pricing tiers.
How 80% AMI caps affect eligibility.
Eligibility calculator and VLIP grant screening.
$2,500 credit that can reduce cash to close.
Compare IHCDA, Chenoa, Luminate Path, and more.
HomeReady allows as little as 3% down for eligible purchase transactions when guidelines and occupancy rules are met. Repeat buyers can often use the same low-down structure when AMI and credit qualify.
Reserve requirements depend on DU findings, property type, and your overall risk profile. Multi-unit purchases and higher-risk files often need more cash left after closing.
Yes. Gift funds from eligible donors are commonly allowed for down payment and closing costs on HomeReady, subject to a gift letter, transfer documentation, and underwriting.
Putting more than 3% down lowers your starting LTV, which can reduce PMI cost and reach the 20% equity cancellation point sooner. We model both cash-to-close and monthly payment tradeoffs.
Ryan & Steve will model 3% vs 5%+ scenarios, gift funds, and VLIP or DPA stacking against your real purchase price.
HomeReady is a registered trademark of Fannie Mae. All loans are subject to credit and property approval. Program guidelines, income limits, and pricing are subject to change without notice and may not be available in all areas. This website is not affiliated with or endorsed by Fannie Mae, HUD, or any government agency. Information is for educational purposes only and is not a commitment to lend.