Homeready is designed to facilate the home buying process.
It allows homebuyers to put as low as 3% down to obtain a mortgage compared to 3.5% for FHA. Unlike FHA, Homeready requires a credit score of 620 to be eligible. However, with a score of 680 or above, one might be able to benefit from better rates.
When it comes to funds to close ( down payment or closing costs), Homeready provides a little flexibility as to the source of funds ( funds can come from a gift, grants, parents, rental income…). lets note that there is no minimum personal funds requirement.
Unlike FHA, the mortgage insurance for Homeready is cancellable. Once the equity reaches 80%, the Mortgage insurance is cancellable. In addition with a LTV of 90% ( a downpayment of at least 10%), there might a possibility of reduced Mortgage insurance.
With homeready, you might be able to use a projected rent as part of one income to qualify for a property. Assuming that you are purchasing a property with a rentable unit ( a basement or separate unit). It is possible to use the income from that unit, as long as a lease can be provided for occupancy after purchase. let’s note that only 75% of that unit can be used as income ( a separate unit provides $1000/ month, the lender will use $750/ month as your monthly income).
You do not need to be a first time home buyer to use Homeready unlike FHA.
As with most programs, there are income restrictions