More flexible, affordable mortgage option from Fannie Mae

Wednesday, December 23, 2015

Low-to-moderate income borrowers have a new mortgage program to consider when shopping for an affordable home loan.

Home Ready, backed by Fannie Mae, offers fixed rate mortgages with low downpayments and options for multiple income sources.

To qualify for a Home Ready loan, borrowers must:
•    Have a three percent downpayment ($3,000 on a $100,000 loan)
•    Not own another home
•    Complete a homebuyer education course online (4-6 hours)

For the first time, income from others in the household (grandparents, children, friends, renters etc.) can be counted to qualify for a home loan. Home Ready mortgages are available for new and repeat homebuyers, as well as for home refinancing.

While there are no income limits to qualify for a Home Ready loan, these mortgages are available for homes purchased in low-income areas, high-minority neighborhoods, and Federal Emergency Management Agency (FEMA)-declared natural disaster areas (due to events such as floods, storms, and fires).

Mortgage rates on these loans are designed to be lower than those on conventional loans, and do require private mortgage insurance (PMI) when more than 80 percent of the home’s value is borrowed.

Home Ready loans are offered through Fannie Mae-approved mortgage lenders nationwide. Consumer Action reminds borrowers to compare rates from several lenders to get the best offer available.