Selling Guide

Published December 16, 2020

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What is the minimum borrower contribution for HomeReady?

Minimum Borrower Contribution for Purchase Transactions

Fannie Mae does not require a minimum borrower contribution from the borrower’s own funds for any mortgage loan if the loan has an LTV, CLTV, or HCLTV ratio of 80% or less.

If the LTV, CLTV, or HCLTV ratio is greater than 80%, the minimum required borrower contribution from the borrower’s own funds is dependent on the number of units, as noted in the table below.

Number of Units

Minimum Borrower Contribution

Minimum Down Payment Requirement 1

One 2 None 3% 3
Two 3% 15%
Three or four 3% 25%

See B3-4, Asset Assessment, and B5-5.1-02, Community Seconds Loan Eligibility, for information about allowable sources of funds for completing the transaction.

No minimum contribution is required in connection with a limited cash-out refinance transaction.

1  Refer to the Eligibility Matrix for additional details.

2  A minimum 3% borrower contribution and minimum down payment of 5% is required if sweat equity is being used toward the down payment for one-unit HomeReady purchase transactions. See the Sweat Equity section in this topic for additional requirements.

3  3% down payment is permitted for certain purchase transactions. See B5-6-01, HomeReady Mortgage Loan and Borrower Eligibility.

For additional information, see B5-6-02, HomeReady Mortgage Underwriting Methods and Requirements.

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