Eligible HomeReady borrowers can put as little as 3% down on purchase and limited cash-out refinance — 97% LTV against after-improved value on a primary residence, with reduced PMI and HomeReady income limits applying.
HomeReady HomeStyle caps LTV at 97% for eligible borrowers on both purchase and limited cash-out refinance. Your down payment (or equity on refi) is calculated against the total loan amount — acquisition cost plus eligible renovation escrow — relative to after-improved appraised value.
You may put more than 3% down when it improves pricing or DTI, but the program's affordability hook is the low minimum for income-qualified primary buyers who meet ~80% AMI limits.
Renovation contingency (minimum 10%, or 15% if utilities are off) and draw administration fees typically roll into the rehab escrow — not paid separately as out-of-pocket renovation cash at closing.
Renovation dollars go into escrow at closing — you are not wiring the full rehab budget to the contractor on day one.
Minimum 3% on purchase to reach 97% LTV against after-improved value — or more if you choose.
Lender fees, title, recording, and prepaid taxes/insurance due at closing.
Post-closing liquid assets when DU or lender overlays require them.
Eligible gift money and down payment assistance can offset cash-to-close when documented correctly.
| Factor | HomeReady HomeStyle | FHA 203(k) |
|---|---|---|
| Primary purchase LTV | 97% (3% down) | 96.5% (3.5% down) |
| Income limits | ~80% AMI | None |
| Mortgage insurance | Reduced PMI — cancellable | MIP — often for life of loan |
| Gift funds | HomeReady/conventional rules | FHA gift rules |
Related HomeReady HomeStyle guides and sister programs.
~80% AMI cap for HomeReady eligibility.
Score tiers that affect pricing at 97% LTV.
Full qualification pillars for this combo.
Standalone HomeReady 3% down guidance.
How HomeReady gift money must be documented.
Calculator and full program guidelines.
Your equity requirement applies to the total loan structure — acquisition plus eligible renovations — against after-improved value. Plan cash for the combined amount, not just the listing price.
Yes, when conventional HomeReady gift rules are met — typically from an eligible donor with a gift letter and documented transfer. This applies to down payment and closing costs on primary residences.
Often yes. Closing costs, prepaid items, and post-closing reserves sit outside the down payment. Renovation contingency (10%/15%) is usually inside the loan escrow, not extra cash you bring — unless LTV or appraisal forces it.
HomeReady HomeStyle allows 3% down (97% LTV) vs. 3.5% on FHA — but AMI limits, credit, and PMI vs. MIP decide which is cheaper overall. FHA has no income cap.
Ryan & Steve model cash-to-close on your fixer-upper — purchase plus rehab at 97% LTV when HomeReady AMI rules are met.
HomeReady and HomeStyle are registered trademarks of Fannie Mae. All loans are subject to credit and property approval. Program guidelines, income limits, LTV 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.