Welcome back to the Complaints Department, where every gripe comes with a fix. This Saturday's item on the garage sale table: the income cap on HomeReady and Home Possible.
Fannie Mae and Freddie Mac built two of the best first time buyer loans in America. Then they locked the door. To get either one, your household income has to sit at or below 80% of the area median income for the home's address.
In most big markets, that rule now does something strange. It says you earn too much for the help, while the math says you earn too little to buy the house. My proposal is simple: open HomeReady and Home Possible to every first time buyer, regardless of income.
HomeReady and Home Possible are not giveaways. They are conventional loans with the same credit standards, plus three pricing breaks that lower the monthly payment.
https://ami-lookup-tool.fanniemae.com/amilookuptool/ link to look up tool.
Lower coverage means a cheaper monthly mortgage insurance premium. Waived price adjustments mean a better rate or lower closing costs. Same borrower, same house, same down payment, smaller payment. Sources: MGIC coverage table, FHFA fee changes via NAR.
In Charlotte, the income you need to buy a typical home is about $41,000 more than HomeReady allows. That is not a loophole. That is a program aimed at a house that barely exists.
Here are the numbers for my own backyard:
A household earning exactly the Mecklenburg median, $111,400, is $22,280 over the cap and still about $18,600 short of what the median home takes. Too rich for the help, too poor for the house. Sources: Fannie Mae AMI Lookup Tool (Mecklenburg County, NC),
Now add student loans. Every dollar of a monthly student loan payment counts against your debt to income ratio. A teacher and a nurse earning $115,000 together, carrying $600 a month in student loans, are too rich for HomeReady and too stretched for the median house. They are exactly who these programs should be for.
The typical first time buyer is now 40 years old, a record. In 2021 it was 33. In 1981, when NAR started tracking, it was 29.
First time buyers made up just 21% of purchases in NAR's 2025 profile, also a record low. NAR's research team says that share has fallen by half since 2007. Buyers told NAR that rent, student loans, credit cards, car loans and childcare all held back their savings.
This is the group the 80% line misses: the 30 something renter with a degree, a decent salary, a student loan payment and no family money. They are not low income on paper. In a big market, they are priced out in practice. Sources: Washington Examiner on NAR 2025 profile, WLOS on NAR 2025 profile.
FHFA can make this change without Congress. It oversees Fannie Mae and Freddie Mac, and it already rewrote their fee pricing for first time buyers in 2022. Here is what I am asking for:
Repeat buyers still have plenty of options. First time buyers are the ones with no equity to roll forward, and they should get the best pricing the system offers.
"These programs are for low income buyers." They still would be, and those buyers keep every benefit they have today. The question is how we measure need. A household at 120% of AMI that can't afford the median home needs help, whatever its paycheck says.
"It adds risk." The underwriting does not change. Every loan still needs mortgage insurance, still runs through automated underwriting, still requires education. A lower monthly payment is the opposite of added risk.
"It costs Fannie and Freddie money." First time buyers at or below 100% of AMI already get waived upfront fees. Extending the HomeReady pricing is a step from a policy that exists, not a new subsidy built from scratch. And every one of those buyers pays a guarantee fee for 30 years.
"Just use FHA." FHA charges an upfront mortgage insurance premium, and with less than 10% down, the monthly premium stays for the life of the loan. Conventional mortgage insurance comes off as equity builds. Pushing a buyer to FHA because they earn $5,000 over a cap is not a fix. It is a tax on being in the middle.
One broker complaining is a gripe. Ten thousand buyers, agents and loan officers saying the same thing is a policy conversation.
Drew Fisher, Founder, Pure Rate Mortgage. NMLS #44061. Company NMLS #2578474.
This article reflects the opinions of Drew Fisher and is for informational and educational purposes only. It is not financial, legal or tax advice, and it is not a commitment to lend or an offer of credit. Program guidelines, income limits, area median income figures, mortgage insurance requirements and pricing are set by Fannie Mae, Freddie Mac and FHFA and can change without notice. Figures shown are examples based on public data as of October 2026. Eligibility depends on your income, credit, property and full underwriting approval. HomeReady is a registered trademark of Fannie Mae. Home Possible is a registered trademark of Freddie Mac. Neither company has reviewed or endorsed this article. Pure Rate Mortgage LLC, NMLS #2578474. Drew Fisher, NMLS #44061. Equal Housing Opportunity. Licensing information: nmlsconsumeraccess.org
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