Expanded 97% LTV Options

According to consumer research conducted by Fannie Mae, the primary Key Features
barrier to homeownership for first-time home buyers is saving money for Desktop Underwriter (DU)
the down payment and closing costs. To expand access to credit and to underwriting required
support sustainable homeownership, Fannie Mae offers 97% loan-to- 1-unit principal residence
value (LTV)/combined LTV (CLTV)/home equity CLTV (HCLTV) financing (including condos and
to help creditworthy home buyers who would otherwise qualify for a PUDs; manufactured
housing is not eligible)
mortgage but may not have the resources for a larger down payment,
and a refinance option for Fannie Mae loans. Fixed-rate mortgage with
maximum term of 30 years
NOTE: HomeReady borrowers do not need to be first-time home Reserves (if required per
buyers to access the 97% LTV option for a home purchase. DU) may be gifted

Purchase Options for 97% LTV

HomeReady Fannie Mae Standard

First-time home buyer Not required Required

Income limits No limits in low-income census tracts; 100% of AMI in No limits

high-minority census tracts or designated disaster areas;
80% of AMI in all other census tracts
MI coverage 25% MI coverage for LTV ratios of 90.0197%; standard Standard MI coverage; or Minimum MI coverage
MI coverage for LTV ratios of 90% or less. Minimum MI may be used subject to LLPA for Minimum MI
coverage may be used subject to LLPA for Minimum MI.
Pre-purchase Required pre-purchase homeownership education online Not required
homeownership course through Framework; borrowers will have access
education and to housing counseling for the life of the loan through
housing counseling Framework

Pricing Standard risk-based pricing waived for LTVs >80% Standard risk-based LLPAs (based on loan risk
with a credit score >=680 (risk-based LLPA cap of 1.50% characteristics)
applies for loans outside of these parameters). Note that
any Minimum MI LLPA is not subject to the cap and will
be required if the Minimum MI coverage is selected.
Refinance Option for 97% LTV
HomeReady Fannie Mae Standard
Limited Cash-Out Not eligible The lender must document that the existing loan
Refinance (LCOR) for is owned (or securitized) by Fannie Mae.
an existing Fannie (HomeReady loans are limited to a maximum 95% Documentation may come from the lenders
Mae Loan LTV/CLTV/HCLTV for LCOR transactions.) servicing system, the current servicer (if the
lender is not the servicer), Fannie Maes Loan
Lookup tool, or another source confirmed by the
lender. All other standard LCOR policies apply.
Note: This table summarizes the differences between the HomeReady and Fannie Mae Standard 97% LTV Options. All HomeReady or Fannie Mae
Standard requirements apply per the Selling Guide.
Definitions: AMI: area median income; LLPA: loan-level price adjustment; first-time home buyer: At least one buyer must not have owned any
residential property in the past three years (full definition); homeownership education and housing counseling: See Selling Guide section B2-2-06.

Resources: 97% LTV Options FAQs | HomeReady FAQs

All eligibility criteria and requirements are subject to the formal terms and conditions of the Fannie Mae Selling Guide.
2015 Fannie Mae. Trademarks of Fannie Mae. November 6, 2015 Page 1 of 1