HomeReady rules, grants, mortgage insurance and seller credits
Buying a Condo at The Royalton With a Smaller Down Payment Through HomeReady
Updated October 2026
Can I buy a condo at The Royalton in Houston with a small down payment, such as 5 percent down?
Yes: as of November 2025, Fannie Mae's Selling Guide caps HomeReady loan-to-value at 97% in DU and 95% manually underwritten for a one-unit principal residence, so 5% down fits both.
Paige Martin, Houston Properties Team, The Royalton
Source: Fannie Mae Selling Guide, HomeReady underwriting methods and requirements, November 2025.
Can a HomeReady loan finance a unit at The Royalton?
Fannie Mae's Selling Guide, in its HomeReady eligibility topic dated June 2025, lists units in condos among the eligible properties. The Royalton is a 33-story tower of 253 condominium homes at 3333 Allen Parkway, so a unit here falls in that category.
The program also tests income. Under the same topic, total annual qualifying income may not exceed 80% of the area median income for the location of the property.
That ceiling is tied to where the home sits, so the figure that applies is the one for 3333 Allen Parkway. Ask your loan officer for it before you set a price range.
Does 5 percent down fit HomeReady's loan-to-value limits for a Royalton unit?
Five percent down leaves a loan of 95 percent of the value. Fannie Mae's Selling Guide, in its HomeReady underwriting topic dated November 2025, sets two ceilings for a one-unit principal residence, depending on how the file is underwritten.
The DU ceiling is 97 percent and the manual ceiling is 95 percent. A loan at 95 percent of value sits within both, provided the unit is the home you live in.
The same topic limits other financing: the occupant borrower may not have more than two financed properties. If you will still own a mortgaged house when you close here, tell your lender how many financed properties you will hold that day.
The maximum LTV ratio is lower for manually underwritten transactions versus those underwritten in DU (95% versus 97% for one-unit principal residences).
Can a seller credit at The Royalton pay the down payment or the HOA assessments?
Fannie Mae's topic on interested party contributions, dated May 2025, covers credits from a seller. It shuts the down payment out entirely.
Credits still have a place. Financing concessions are acceptable toward your closing costs, prepaids included, or toward HOA assessments covering any period after the settlement date, limited to no more than 12 months. The guide counts paying HOA fees for 12 months or less as an interested party contribution.
At The Royalton each home's assessment follows its allocated interest in the recorded declaration rather than its square footage. The resale certificate states the figure for that home, so read it before you write a credit for assessments into the offer.
Fannie Mae does not permit IPCs to be used to make the borrower's down payment, meet financial reserve requirements, or meet minimum borrower contribution requirements.
How do grant funds work on a Royalton purchase, and what must come from you?
Fannie Mae's grants topic, dated May 2025, covers a loan secured by a principal residence. On that loan, funds donated from acceptable entities may pay all or part of the down payment, closing costs or financial reserves.
That use is subject to minimum borrower contribution requirements. For a one-unit principal residence, the guide states the minimum this way.
Ask whoever offers the grant whether they are an acceptable entity under that topic. Then ask your lender to confirm it in writing before the option period ends.
One-unit principal residences: The borrower(s) must make a 3% contribution from their own funds, other eligible sources of funds as described in Chapter B3-4, Asset Assessment, or through a Community Seconds loan.
Which mortgage insurance and education rules come with a HomeReady loan here?
Fannie Mae's mortgage insurance topic, dated August 2019, sets coverage requirements for first-lien mortgages in a table by loan-to-value range, and HomeReady loans fall under it. Ask your lender which coverage level it plans for a loan at 95 percent of value.
Education is the other requirement. Under the June 2025 eligibility topic, homeownership education is required for HomeReady purchase loans when all occupying borrowers are first-time homebuyers. Build the time for it into your calendar before the contract's deadlines start.
What does the lender check about The Royalton itself?
A HomeReady loan on a unit also depends on the building. Fannie Mae's project standards, dated August 2026, have the lender determine that the project meets Fannie Mae's eligibility requirements before it delivers a loan on a unit.
At The Royalton the association has ten days from a written request to produce a resale certificate. Send the lender's project questions at the same time, so both sets of answers arrive inside your contract's deadlines. For the project tests in full, read How a Lender Reviews the Condo Project Before Financing a Unit at The Royalton.
Paige Martin specializes in condo purchases and purchases in an association-governed building, with 43 closings at The Royalton since 2004, most recently July 2026. Send the unit number and your lender's project questions, and you will hear which document answers each one and who produces it.
Questions & answers
The Royalton questions, answered
Is HomeReady an FHA loan, or is it a conventional mortgage?
HomeReady is conventional. Fannie Mae's Selling Guide, in its June 2025 eligibility topic, calls it a conventional community lending mortgage that offers underwriting flexibilities to qualified borrowers who meet specific income criteria. A HomeReady file on a Royalton unit runs through Fannie Mae's rules for conventional loans, and the building is reviewed against Fannie Mae's own standards for condo projects.
That matters if a lender brings up FHA. Fannie Mae's Selling Guide, in a topic dated September 2018, accepts conventional loans in established projects on the FHA-approved list, provided the approval came through FHA's HUD Review and Approval Process (HRAP). An approval completed through an FHA Direct Endorsement Lender Review and Approval Process (DELRAP) does not qualify. Which route a lender takes on The Royalton is the lender's call. Ask early whether it will review the project itself or rely on an FHA approval, and keep its answer with your loan file.
Does HomeReady only cover new construction, or can I use it in a tower finished in 2002?
Both kinds of building can qualify. Fannie Mae's Selling Guide, in its HomeReady eligibility topic dated June 2025, lists existing structures and new construction among eligible properties. The Royalton was completed in December 2002 as a rental tower and became a condominium after a December 2004 sale, so a unit here is an existing structure under that wording.
The building's age does not settle the loan on its own. The project still has to clear the lender's review, and the conversion history is part of what a lender reads. Fannie Mae's Selling Guide says FHA condo project approval is not acceptable for conventional loans on units in new or newly converted condo projects. How the guide classes this building's 2004 conversion is the lender's determination. Give your loan officer the street address, the unit number and the conversion date at the first conversation.
Can the lender raise my interest rate to pay for down payment help?
Not under Fannie Mae's grants topic, dated May 2025. It says down payment assistance may not be funded in any way through the first mortgage, such as through premium pricing. Help toward the down payment on a Royalton unit has to come from a source other than the loan itself, and your lender will ask where it came from.
The route that topic opens is donated money from acceptable entities, on a principal residence, subject to the minimum contribution rules. Credits from a seller are closed to the down payment as well, under the separate topic on interested party contributions. When an offer of help arrives, ask who is paying it, whether it is a grant or a loan, and how it reaches the closing table. Put those answers in writing to your lender before you sign a contract with a firm closing date.
If I need the homeownership education, can I take it online?
Yes. Fannie Mae's homeownership education topic, dated November 2025, says the education may be delivered in various formats: in-person, Internet, via telephone, or a hybrid format. You can finish it from wherever you are while a Royalton purchase moves forward. The requirement applies to HomeReady purchase loans where every occupying borrower is a first-time homebuyer.
Counseling is the alternative. The same topic lets a borrower receive housing counseling in lieu of homeownership education. That counseling must be provided by a HUD-approved agency and meet HUD standards for the delivery of this service. Ask your lender which course or agency it accepts and what proof of completion it wants. Finish it early, because a required step left until the end can crowd a closing date, and a Royalton contract carries its own deadlines for the association documents.
What happens if my lender picks a lower mortgage insurance coverage level?
Fannie Mae's mortgage insurance topic, dated August 2019, allows a lender to choose less than standard coverage, but no lower than minimum coverage. A lender that does so is assessed an LLPA based on the loan-to-value ratio and the representative credit score for the loan. Ask whether that choice is planned on your Royalton loan and how it is priced.
Two numbers drive that charge in the guide's wording, so have both in hand when you ask. Your loan-to-value comes from the price and your down payment. Your representative credit score comes from the lender's credit review. Ask the loan officer to show the coverage level and the resulting cost in writing, side by side with standard coverage, before you lock a rate.
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