Just as the Fannie Mae My Community program was becoming more popular, Fannie Mae is going to change it. Fannie released their Desktop Underwriting notes effective in November and one major change is to the My Community Program.
As of November 16, 2o13, Fannie Mae is updating their underwriting system to require 5% down instead of 3%. This means that you will have to have a minimum of 5% into your mortgage. They are allowing states that have Housing Programs such as Minnesota Housing to continue to provide mortgages with 3% down. So if you can qualify as a first time homebuyer with the Minnesota Housing program, you can still get a conventional loan with 3% down. We have seen documentation from Minnesota Housing confirming this.
If you are currently looking for a home and were hoping to use the My Community Program, you will need to be able to close on your home by November 16. This does give you a short window to continue with the program. Otherwise, you will need 5% of your own money.
We do not know if this will affect the Fannie Mae Homepath program, I am guessing it will. The only exceptions noted in the release notes are for State Housing Agencies.
FHA still allows 3.5% down, but the mortgage insurance is much higher than the My Community Program. If you have the ability to put 5% down, conventional loans will be a great option for you. Talk to your loan officer and see what your options are.
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants – Email – Website
