HomeReady and Home Possible: income limits and who qualifies

HomeReady income limits, the most you can earn and still get the loan, depend on the home's address. The yearly income of everyone who signs the loan must be at or below 80% of the area median income, the middle income where that home is. HomeReady is Fannie Mae's loan. Freddie Mac's Home Possible uses the same 80% limit, and both allow 3% down.

You don't apply to Fannie Mae or Freddie Mac. A bank or other lender makes the loan, so ask lenders which of the two they offer.

What are HomeReady and Home Possible?

HomeReady and Home Possible are home loans for buyers with low or middle incomes and little cash for a down payment. Fannie Mae and Freddie Mac are two companies that buy home loans from lenders, and each sets the rules for its own loan. Both are conventional loans, which means no government agency insures them.

Both are for a home you will live in, not a home you rent out. You can buy a house, a condominium, a co-op apartment (a share in a building whose residents own it together) or a home in a planned community. A building with two to four units also works if you live in one of them, but it needs at least 5% down. A manufactured home is allowed with extra conditions and usually needs at least 5% down.

How does the 80% income limit work?

The total yearly income of everyone who signs the loan, before taxes, must be at or below 80% of the area median income for the home's location. That is where the home you are buying is, not where you live now.

An example. Say the area median income where the home is located is $100,000. The income limit is 80% of that, or $80,000. A couple who earn $76,000 together is under the limit. A couple who earn $85,000 is over it, so they can't use either loan for that home.

Each place has one limit. Unlike most rental housing, the limit doesn't go up with the number of people in your household.

Two rules change whose income counts toward the limit:

• Someone who signs but won't live there. A parent who co-signs the loan but won't live in the home is a non-occupant co-borrower. That person's income counts toward the limit too, and with one on the loan you usually need at least 5% down.
• Rent from someone who lives with you. Rent from a renter who has lived with you for at least a year can count as income to help you qualify, up to 30% of your qualifying income. Once it counts as your income, it counts toward the limit too. You need papers that show the shared address and the rent payments. Rent from a basement or backyard apartment on the property can count too, under separate rules, so ask your lender how it would be counted.

If the home has rules on who you can sell it to and for how much, as many below-market homes do, Fannie Mae has extra rules for the loan. Ask your lender early whether it can make a HomeReady or Home Possible loan on that home.

There is no exception for low-income neighborhoods. Since July 2019, the 80% limit has applied everywhere, as Freddie Mac's 2019 bulletin and Fannie Mae's HomeReady FAQ say.

How do you look up the limit for a home?

Look up the limit with the home's full street address in each company's free tool:

• HomeReady: Fannie Mae's Area Median Income Lookup Tool. Lenders must use Fannie Mae's own figures, not the area median income figures HUD, the federal housing department, posts.
• Home Possible: Freddie Mac's Income and Property Eligibility Tool, which shows the most a borrower can earn in that neighborhood.

The limits change every year. Freddie Mac's 2026 figures took effect on June 13, 2026, says its notice. The lender's system makes the final decision, so ask your lender to confirm the number you find.

How much do you need for a down payment?

You need 3% down at the least. Both companies allow a loan of up to 97% of the home's value on a one-unit home, with conditions. For a one-unit home, Fannie Mae doesn't require any of that 3% to come from your own savings. It can come from gifts, grants or a second loan from a housing program.

A worked example. On a $300,000 home, 3% down is $9,000, so the loan is $291,000. An FHA loan, insured by the Federal Housing Administration, needs at least 3.5% down, which is $10,500. So the 3% loan needs $1,500 less at the start.

What credit score do you need?

The credit score you need depends on how the lender reviews your loan.

• Fannie Mae. When the lender runs your loan through Fannie Mae's automated system, the software your lender runs your numbers through, there has been no minimum score since November 15, 2025. The system looks at your whole credit history instead. When a person at the lender reviews the loan by hand, the minimum is 620 for a fixed-rate loan.
• Freddie Mac. Freddie Mac's automated system must approve the loan with the result "Accept". Ask your lender whether yours gets that result. A loan reviewed by hand needs a score of at least 660 for a fixed-rate purchase of a one-unit home.

Is a homebuyer class required?

A homebuyer class is required if every borrower who will live in the home is a first-time buyer, someone who hasn't owned a home in the past three years. At least one of you must finish a homeownership education course before closing, the day you sign the final papers and the home becomes yours.

A class can also be required when no borrower has a credit score, or when your credit history is only records like rent and utility payments. The class must come from someone with no stake in your loan, such as a HUD-approved counseling agency, never from your lender. Fannie Mae's free HomeView course counts. Our guide to the homebuyer education class explains how to pick one.

How does mortgage insurance work on these loans?

Mortgage insurance is a monthly charge on most loans with less than 20% down. The Consumer Financial Protection Bureau, a federal agency, says it protects the lender, not you. HomeReady and Home Possible require less insurance coverage than most conventional loans, and on a one-unit home it can be cancelled later. The price depends on the lender and the insurer, so compare the Loan Estimate, the form each lender gives you with the loan's costs.

How do they compare with an FHA loan?

An FHA loan comes from a private lender, and the Federal Housing Administration, part of HUD, insures it.

Our guide to FHA versus conventional loans goes further, and our FHA loan requirements guide covers HUD's rules.

How big can the loan be in 2026?

Both loans must stay under the conforming loan limit. For 2026, the Federal Housing Finance Agency set it at $832,750 for a one-unit home in most places, and up to $1,249,125 in counties where homes cost more. On a HomeReady loan above 95% of the home's value, Fannie Mae doesn't allow the larger loans offered in those costly counties.

How do you get one?

1. Look up the home's income limit with both tools and the full address.
2. Add up the yearly income of everyone who will sign the loan.
3. Take a homebuyer class if every borrower who will live there is a first-time buyer.
4. Ask two or three lenders for a Loan Estimate for each loan they offer, and compare the costs.
5. Ask your state or city for down payment help. With an approved second loan, the two loans together can be up to 105% of the home's value, so the second loan can also cover some closing costs.

A housing counselor can go through the numbers with you for free or a small fee. Find one with the Consumer Financial Protection Bureau's counselor search. For more ways to pay for a home, see our first-time home buyer guide and our guide to affordable homes for sale.

Homes priced below market have their own income limits. Check your income with our qualify check, browse homes for sale and open housing lotteries, and ask the office selling each home which loans it accepts.