The “3% Down Mortgage” From Fannie Mae
For buyers looking for a low down payment option that is not backed by the FHA, Fannie Mae has two options: HomeReady Mortgage and the Conventional 97.
HomeReady ™ is limited to certain low-income census tracts; and areas with high minority concentrations. By contrast, Conventional 97 is available for use everywhere.
HomeReady™ allows a downpayment of just 3% on a home and permits the “income pooling” for all of the members of a household. This means that income from grandparents, parents, relatives, and working children can all be used to help qualify for a home loan. For many families, this can mean the difference between getting approved for a loan and getting turned down.
HomeReady™ can also be used for a refinance, allowing up to 95% loan-to- value (LTV) in some cases.
In order to be eligible for the HomeReady™ program:
1. You must not be an owner of another residential property in the United States
2. You must agree to complete a 4-6 online homeowner counseling course
The Conventional 97 program is meant to help home buyers who might other qualify for a loan but lack the resources — or the desire — to make a five percent downpayment or more. The 97% LTV program launched in December 2014. It is in high demand among today’s home buyers. Conventional 97 is a Fannie Mae-backed product which allows for a 3 percent downpayment, ultra-low mortgage insurance rates, and a 100% gift from blood or by-marriage relatives.
-
Add a note