If you are a low to moderate income prospective home owner with some credit history and a credit score of around 620, Fannie Mae’s Home Ready program may be able to help get you into the home of your dreams, today! Additionally, if you are not low-income, but are planning to buy in a low-income area, you may be eligible for the Home Ready program. The Home Ready program is available nationwide, and has been designed by Fannie Mae to serve borrowers in every state and area of the United States. The Home Ready program is designed to assist individuals living in lower-income neighborhoods and in minority-led neighborhoods into homes at competitive rates and terms with low down payments.
What is Fannie Mae?
Fannie Mae is the commonly used name for the Federal National Mortgage Association. Fannie Mae is a federal government sponsored organization as well as a publically traded corporation. It was founded during the Great Depression in 1939, and the express purpose of Fannie Mae is to expand the secondary mortgage market and lead efforts that will increase the number of mortgage lenders, in turn expanding home ownership programs and options for Americans of nearly every tax bracket.
What is “low to moderate income”?
The Home Ready program is available to borrowers who live in a neighborhood in which the median household income for that neighborhood or small area is at least 20% below the average median household income for the larger general area. Fannie Mae provides an income eligibility tool on their Home Ready page, which can be found here. In a product feature unique to the Home Ready program, lender underwriters may take into consideration the income from a household member who will not be named on the loan. So, if you have a family member who lives with you and helps support your household, their income may be taken into consideration when you apply for a mortgage.
What are the advantages of the Home Ready Program?
The top advantage of the Home Ready program is that only a 3% down payment is required. Additionally, although you will still be required to carry private mortgage insurance (or, PMI) if you put down less than 20% of your home’s purchase price as a down payment, the Home Ready program offers PMI at much lower rates than with conventional mortgage loans. These are important advantages which can save you literally thousands of dollars over the lifetime of your home loan. Additionally, the Home Ready programs offers competitive borrower repayment options, meaning that you’ll have flexibility to select the repayment plan and terms that best suit your income, lifestyle and financial plans. Also, you can use the proceeds of gifts or grants from either individuals or organization as your down payment, which is a benefit over many other traditional mortgage loan programs.
All Fannie Mae approved lenders can market the Home Ready program, so if the Home Ready program sounds like something you would like to learn more about, contact our office today! You might be surprised to find that we can help you get into the home of your dreams faster than you thought possible.