Are you in the market to purchase a home but concerned about the down payment needed? Fannie Mae recently made some changes to their HomeReady product making it easier for more potential homebuyers to qualify for home financing.
One of the great features about the HomeReady program is that it only requires the homebuyer to make a 3% down payment. However, until recently Fannie Mae had restricted the use of this program to households earning 80% of the area median income (AMI) or below.
The good news is that Fannie Mae has relaxed this income restriction such that households earning up to 100% of the AMI are now able to qualify for the HomeReady program. To understand the impact of this change, consider the following three examples:
▸ In Boone County, Missouri the previous income limit was $58,080. With the change to 100% AMI the income limit is now $72,600.
▸ In Greene County, Missouri the previous income limit was $44,720. With the new income limits it is $55,900.
▸ In St. Charles County, Missouri the previous income limit was $56,240. Under the new income restrictions the income limit is $70,300.
With the expanded income limits more homebuyers will be able to take advantage of this great product. In addition to only requiring a 3% down payment here are several more features that make the HomeReady program more affordable and easier to qualify for than many traditional loan programs:
▸ There is no first-time homebuyer requirement
▸ Lower mortgage insurance (MI) coverage options. Only 25% coverage is required, which translates into a lower payment
▸ Up to 45% debt-to-income (DTI) ratio allowed and up to 50% DTI when certain compensating factors are met
▸ Gifts, grants, and cash-on-hand permitted for down payment
With the aforementioned changes Fannie Mae’s HomeReady Program has made the dream of homeownership more attainable than ever.
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