Excerpts from: Housing Wire, Author Brena Swanson 8/25/15
Thanks to new research and lender input, Fannie Mae has available it’s HomeReady Mortgage that will replace MyCommunityMortgage, Fannie’s previous affordable lending product.
The latest product is designed to help creditworthy borrowers with lower and moderate incomes access an affordable, sustainable mortgage.
Back at the end of 2014, Fannie expanded its MyCommunityMortgage product to include an option for qualified first-time homebuyers that would allow for a down payment as low as 3%.
At the time, the 3% down payment option was only allowed if at least one co-borrower was a first-time buyer. However, with the new update, first-time and repeat homebuyers can purchase a home using HomeReady with a down payment of as little as 3%.
Borrowers will be required to complete an online education course call Framework, to prepare them for the home buying process and provide post-purchase support for sustainable homeownership.
A crucial part to this update, is that income from a non-borrower household member can be considered to determine an applicable debt-to-income ratio for the loan, helping multi-generational and extended households qualify for an affordable mortgage.
Other HomeReady flexibilities include allowing income from non-occupant borrowers, such as parents, and rental payments, such as from a basement apartment, to augment the borrower’s qualifying income.
HomeReady will be available to borrowers at any income level for properties in designated low-income census tracts, and to borrowers at or below 100% of area median income for properties in high-minority census tracts or designated natural disaster areas.
For properties in remaining census tracts, HomeReady borrowers must have an income at or below 80% of AMI. Approximately half of census tracts will be subject to the 100% AMI limit or have no income limit.
(Lending product HomeReady also expands to also include refinance).
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