If you’ve been thinking about buying a home, or you're a real estate pro helping others do the same, there’s a new change you should know about. On May 18, 2025, Fannie Mae rolled out an important update that could help first-time homebuyers qualify for better mortgage products.
Let’s break it down and see how this change could help you save money and open doors to homeownership.
💡 What Is “Area Median Income” (AMI), and Why Should You Care?
Think of Area Median Income (AMI) as the average income level in your local area. Each year, the government updates these numbers to reflect changes in the economy and housing market.
So why does AMI matter for mortgages?
Because it helps decide if you qualify for special loan programs or discounts, especially if you're a first-time buyer or have a moderate income.
Here’s what AMI impacts:
- Whether you qualify for lower mortgage fees
- Access to low down payment programs
- Your eligibility for income-based mortgage options like HomeReady®
📅 What Changed on May 18, 2025?
Starting on May 18, all new mortgage applications will use the updated 2025 AMI numbers, and that’s a good thing for many buyers!
These updates apply to:
- Desktop Underwriter® (DU®)
- Loan Delivery System
- HomeReady® Loan Program
- Fannie Mae’s AMI Lookup Tool
👉 Try the updated tool here: Fannie Mae AMI Lookup Tool
📈 How Does This Help You as a Buyer?
You Might Qualify for Lower Fees
Fannie Mae charges fees based on things like credit score and loan type. But if you earn below a certain income (based on AMI), some of those fees, known as Loan-Level Price Adjustments (LLPAs), get waived.
With the 2025 AMI updates:
- More people now qualify for these waivers
- That could mean lower interest rates and reduced upfront costs
You Could Now Be Eligible for a HomeReady® Loan
HomeReady® is a special loan program for low-to-moderate income buyers. It offers:
- Just 3% down
- Lower mortgage insurance
- Flexible qualification rules
With the new AMI numbers, people who didn’t qualify last year might now meet the income limits in 2025!
🤖 What Happens Behind the Scenes?
When your lender submits your loan through Fannie Mae’s system (called Desktop Underwriter), it automatically checks your income against the 2025 AMI for the home’s location.
✅ If your income is 80% or less of the new limit:
- LLPA fees may be removed
- You could qualify for HomeReady® benefits
🏁 What This Means for You
This is great news, especially for first-time buyers, or anyone earning a moderate income in a high-cost area.
You might now:
- Qualify for a better interest rate
- Pay less in fees
- Be eligible for down payment assistance or programs like HomeReady®
🤝 We’re Here to Help
At Onshore Mortgage, we’re experts at matching buyers with the right loan programs. We’ll walk you through everything, from checking your AMI to helping you qualify for lower costs.
📞 Call us today, or check your area’s income limits using the AMI Lookup Tool.
Let’s find out if this new change can help you get into your next home sooner and save money while you’re at it.
* Income and credit limits apply. Please visit our Disclosures page for details on loan types.
.webp)
.webp)
.webp)
.webp)
