A Comparison of HomeReady and FHA Loan Programs HomeReady vs. FHA A Comparison of HomeReady and FHA Loan Programs

Down Payment Credit Score HomeReady FHA 3% 3.5% Credit Score HomeReady FHA 620 600

Maximum Debt-to-income Income Limits HomeReady FHA Depends on address None Qualifying Income Maximum Debt-to-income HomeReady FHA 45% normal; 50% with compensating factors AUS (DU) determines

Example of Rates for 30 year fixed (as of 5/22/2017) Terms available HomeReady FHA 30, 25, 20, 15, 10 year fixed 30 and 15 year fixed Example of Rates for 30 year fixed (as of 5/22/2017) HomeReady FHA 4.00% (APR 4.911%) 3.625% (APR 4.738%)

Eligible Property Types HomeReady FHA 1-4 family Detached Condos meeting Fannie Mae Full Review Townhomes

Employment Own Other Property HomeReady FHA 2 year work history Own Other Property HomeReady FHA Yes

Mortgage Insurance HomeReady FHA Up Front or Guarantee Fee None 1.75% Monthly 25% coverage .85% Mortgage insurance on HomeReady varies based on factors such as credit score, DTI, etc.

Seller Contributions Gifts allowed HomeReady FHA 3% of purchase price 6% of purchase price Gifts allowed HomeReady FHA Yes

Non-Occupant Co-borrower HomeReady FHA Allowed – income included in income limit for qualifying income Yes, family allows for maximum financing Homebuyer Education HomeReady FHA Yes – only through Framework ($75) No

Additional Features HomeReady FHA Non-Borrower Household Income Yes No Boarder income Cash on Hand Non-Borrower Household Income can be use if it is at least 30% of borrower income and a letter stating they will occupy for at least 12 months Boarder Income can be used if there is a 12 months history (cancelled checks) of this person paying the borrower their portion of the rent. Can be up to 30% of the qualifying income Cash on hand can be used if it is obvious that the borrower has not used a bank account in a standard method (maybe for cashing checks only)

Payment Comparison HomeReady FHA Total Loan Amt 121,250 122,735 Rate 4.00% (APR 4.911%) 3.625% (APR 4.738%) P & I $578.87 $559.73 Mortgage Ins $116.20 $84.71 Insurance $41.67 Taxes $100.00 Total Payment $836.74 $786.11 Scenario is based on purchase price of $125,000 on 30 yr fixed Credit score of 680 Payments based on rate as of 5/22/2017 Up Front Mortgage Insurance financed