What to Know About HomeReady in 2026

Does it feel like it’s taking forever to save up for the down payment on your first home? If you’re buying an average single-family home for $400k, and saving $80k to make a 20% down payment, then yes, it probably will, in fact, seemingly take forever. But what if you qualified for a 3% down payment? All of a sudden, saving $12k for the down payment makes it seem like you could buy your first home tomorrow! Well, maybe not tomorrow, but you could own a home by the end of 2026 with the help of HomeReady! 

Who Qualifies for a 3% Down Payment?  

There are two mortgage options with a 3% down payment, called HomeReady and HomePossible. To qualify, your household income must be at or below 80% of the Area Median Income (AMI). The good news for 2026 buyers is that AMI thresholds have increased! To find the 80% AMI limit in your area, use the HomeReady AMI lookup tool. 

So, you’ve looked up the AMI in your county and have determined that you are eligible for HomeReady. Fantastic! Let’s keep talking… 

What is HomeReady? 

HomeReady and HomePossible are loans offered by Fannie Mae and Freddie Mac, respectively. Why do we point this out? Because it means they are conventional, and not government, like FHA Loans. Being a conventional loan, HomeReady costs less upfront and is accepted by almost every condo or townhome association (a common obstacle for FHA Loan borrowers). 

We will point out, however, that an FHA Loan is still a great option if your income is above the 80% AMI limit. They offer a 3.5% down payment with no income limitation. 

Who Qualifies for the $2,500 Credit? 

As of January 28th, Fannie Mae has extended their VLIP (Very Low Income Purchase) program to February 1st, 2027. This program provides assistance in the form of a $2,500 credit that can be applied toward closing costs or the down payment. To be eligible for the VILP credit, your income must be at or below 50% of the AMI. To find the 50% AMI limit in your county, you can use the same HomeReady AMI lookup tool. 

Qualifying Sooner 

If you’re eligible for HomeReady and/or the VLIP credit, you’re on the road to saving up for the down payment on a home sooner! If 2026 is your year to become a homeowner, reach out to get started on a plan.