Fannie Mae announced a new program designed to help low to middle income borrowers purchase a new home. This program will replace the My Community program that ends on December 16th. This program will give buyers an alternative to FHA financing.
The HomeReady program requires 3% down for single family homes. If you are buying a duplex, you will need 15% down – this is a change from the My Community Program. The down payment can be a gift unless you are buying a duplex, then you need 3% of your own money. Mortgage insurance is also required but is at the 25% coverage which is lower than standard mortgage insurance for 3-5% down loans.
One huge benefit to this program is the ability to use income from a nonborrower household member. So if you have a spouse or friend that will be living with you but is not on the mortgage, you can use some of their income to qualify. That will help many families that may not have qualified for a home in the past.
Non occupant borrowers are also allowed on this program, this means that a parent could help you qualify for a home. There are also income limits for this program unless you are buying in a low income census tract. The income limit is 80% of the HUD median income.
You are required to complete the Framework first time homebuyer class online. It takes about 3-4 hours and costs $75.
This program may allow you to purchase a home that you didn't think you could! The program will be available in December 2015. Talk to your loan officer if you think this program might work for you!