Monday, December 14, 2015

Get Ready for HomeReady

FannieMae has officially rolled out it's HomeReady product a week ahead of expectations. This program replaces their MyCommunity loan program which has been phased out. You must meet the income guidelines which are based on the area's median income as designated, unless the property is within a low income census tract and designated disaster areas. Properties may include manufactured housing, accessory dwelling units (ADU / Mother in Law or basement Apartment), 1-4 units, condos, and PUDs. Debt-to-income may be allowed as high as 50% with compensating factors as allowed in the automated underwrite, otherwise that limit is 45%. An online course on homeownership education is required for this 97% loan to value product. The down payment and closing costs may also be gifted, granted, and Community Seconds are allowed. Non-occupying borrowers are allowed as well but with a max loan to value of 95% and need not be related, however the relation should make sense. Manual underwriting may be available down to credit scores as low as 620. Aside from greater flexibility in underwriting HomeReady's main attraction its "lower than standard mortgage insurance coverage – 25% for LTVs above 90% to 97% " according to FannieMae. 

I am excited to see this loan product applied in real world scenarios as an attractive mortgage option! Keep in mind there are other low down financing options such as the VA Loan for qualified Veterans, USDA Rural as eligible, FHA, or Conventional with private mortgage insurance that may be a better fit. A side by side comparison will guide you in choosing the right home loan based on your individual needs and goals. If you would like more information or to apply for any of these loan products contact me today!

Additional Resources:

FannieMae Fact Sheet

HOME by FannieMae (APP)

HomeReady vs. MyCommunity