After much research and feedback from lenders as well as home buyers, Fannie Mae has announced that it will provide an enhanced affordable lending product designed to meet the financial needs of responsible, credit-worthy buyers.
Fannie has recognized the many financial challenges many would-be homebuyers are facing. Many can't afford a large down payment, they may have multiple student loans, and/or they may rely on income from non-traditional sources, such as parents or other family members. These factors have impacted the ability of a lot of people from qualifying for a mortgage. Well, that may be about to change . . . perhaps for YOU!
The new program, called the HomeReady™ Mortgage, will be available from lenders later this year, and will offer expanded eligibility guidelines which will be real game changes for a lot of people who could not previously qualify for a mortgage:
- A 3% down payment option. First-time and repeat homebuyers will be able to purchase with a down payment as low as 3% of the purchase price
- Income from a household member who is not a borrower (meaning they won't be on the mortgage) will be considered. This means that in multi-generational households, the income of children, grandparents, and other family members may help buyers qualify for a mortgage.
- All borrowers do not have to reside in the property. Parents who won't be living in the home can be co-borrowers on the loan to help their children qualify for a mortgage.
- Rental payments may be considered as another allowable income source to help qualify a buyer (i.e., rental payments from a basement apartment).
In order to qualify for the HomeReady™ Mortgage buyers will be required to complete an online homeownership education course to help prepare for the responsibilities of buying and owning a home. Learn More on Fannie Mae's website.
For more details and to see if you qualify, talk to your lender. Since this program is not expected to roll out to lenders until later on this year, you may have to wait to get all the details.
