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Fannie Mae just made getting a mortgage easier with the release of their HomeReady mortgage. The new program will make homeownership possible for people who were previously deemed unqualified for loans.
This new lending product will replace Fannie Mae’s MyCommunityMortgage and features a new capability through Desktop Underwriter which helps lenders by automatically identifying possibly qualified loans.
On their website, Fannie Mae articulates that HomeReady mortgage “is designed to help lenders confidently serve today’s market of creditworthy, low- to moderate-income borrowers, with expanded eligibility for financing homes in designated low-income, minority, and disaster-impacted communities.”
Under the new guidelines, borrowers will have to complete an online education course which will prepare them for the home buying process and for sustaining their home after purchase. Additionally, income from a non-borrower household member can be used to decide the debt-to-income ratio for the loan, a development which will help multi-generational and extended households obtain affordable mortgages.
Further innovations are that income from non-occupant borrowers will be allowed to increase a borrower’s qualifying income, and first-time and repeat homebuyers can use HomeReady to buy a home with a down payment as low as 3 percent.
In a news release announcing HomeReady, Fannie Mae delineates who qualifies for their new lending product, “HomeReady will be available to borrowers at any income level for properties in designated low-income census tracts, and to borrowers at or below 100% of area median income (AMI) for properties in high-minority census tracts or designated natural disaster areas. For properties in remaining census tracts, HomeReady borrowers must have an income at or below 80% of AMI. Approximately half of census tracts will be subject to the 100% AMI limit or have no income limit.”
With the new HomeReady mortgage, Fannie Mae is helping make the dream of homeownership a reality for Americans who have until now been unable to buy and maintain a home. This new lending product helps the mortgage industry, the consumer, and increases the attainability of the American Dream.