Yes, First Time Home Buyers, there is a Santa Claus after all!
Both Fannie Mae and Freddie Mac announced this week they will offer new, loan down payment options for first time home buyers** with down payment as low as 3%*. Fannie Mae will begin accepting applications immediately and Freddie Mac will after March 23, 2015. What this means for first time home buyers is another option is now available to compare against other low down payment programs like FHA or other community bond programs. Both agencies require the mortgage to be fixed-rate, secured by a 1-unit property only, and manufactured homes are not allowed.
Fannie Mae is offering two programs, both of which require at least one borrower to be a first time home buyer.
The My Community Mortgage® has additional qualifications such as meeting area median income limits as well as pre-purchase home buyer education and counseling. The My Community Mortgage® allows a lower cost Mortgage Insurance coverage amount, which can be a benefit to qualified borrowers. Fannie Mae also offers a non-MCM option that does not have an income limit requirement or requirement for pre-purchase education or counseling, but does require at least one borrower to be a first time home buyer. The definition of a first time home buyer in the Fannie Mae selling guide is one who has not had ownership interest in a property in the last three years.
Freddie Mac is offering their Home Possible Advantage® with as low as 3%* down payment with settlement dates on or after March 23, 2015. This program does require income and credit qualifications, and requires at least one borrower participate in a homeownership education program.
Both agencies allow a Community Second Mortgage by an approved Affordable Second agency up to 105%. It is important to note that this is not all encompassing of all of the new mortgage rules and that full qualifying and underwriting will be required for any applicant. This is simply an overview of the new program for your information only, and should not be considered a loan approval. This can be a wonderful option for qualified, first time home buyers to enter into the homeownership arena in a way they have not before and we look forward to reviewing this program with our clients to determine their best option for their new home loan. Call or email us today for more information to get started on your new home loan!
1 At least one borrower must be a first time home buyer. Borrowers who have not held interest in a property in the last three years are also considered first time home buyers. *3% down payment on $100,000, 4.250%/ 5.166%% APR, 640 FICO, 30 -year fixed rate mortgage. Income limits may apply. 97% LTV programs are available to first time home buyers only. Home buyer education courses are required. Mortgage insurance is required for LTVs greater than 80%. Rates subject to change. Subject to credit approval. Programs subject to change without notice. Inlanta Mortgage, Inc. NMLS# 1016. ** Borrowers who have not held interest in a property in the last three years are also considered first time home buyers. My Community Mortgage® is a registered trademark of Fannie Mae. My Home Possible® is a registered trademark of Freddie Mac.