Both programs hinge on one number: qualifying income at or below 80 percent of the area median income, with as little as 3 percent down. HomeReady is Fannie Mae's version and Home Possible is Freddie Mac's. An earlier version allowed higher incomes in certain census tracts, but that flexibility is gone, so plan on the flat 80 percent cap and confirm the current figure for the property's location. The payoff is real, especially for lower-score borrowers: - Cheaper pricing. HomeReady waives the loan-level price adjustments that otherwise raise costs for lower credit scores on all its loans; Home Possible waives them on low-down-payment loans for scores of 680 and up. - Reduced mortgage insurance. Both allow lower MI coverage than standard conventional loans, which trims the monthly cost. - Education, sometimes. A homebuyer education course is required only when every borrower who will live in the home is a first-time buyer, and one borrower completing a qualifying course satisfies it. How useful the cap is depends on where you buy. In an expensive metro, 80 percent of area median income can be tight enough that a USDA loan (in eligible areas) fits better, while in more affordable markets the limit comfortably covers a typical first purchase. Confirm the current income limits for your county before assuming you're over or under the line.