Great news for low- to middle-income borrowers: The new HomeReady Mortgage program is finally here.
This new mortgage product, available from Movement Mortgage to owner-occupied home buyers, expands access to affordable home financing for borrowers across the country. Fannie Mae introduced HomeReady in August, and we’ve been waiting for a green light until this month. This program is open to borrowers with incomes at 80% of the Area Median Income (AMI) or less. Homes purchased in a high-minority census tract or a designated disaster area can have income up to 100% of the AMI. Plus, borrowers of all income levels are eligible when purchasing a home in a low-income census tract.
HomeReady includes several features that will make buying a home in 2016 a smoother process for many borrowers. Take a look.
1. More affordable down payment options.This is welcome news for home buyers ready to move but lacking a large down payment. HomeReady allows for as much as 97% loan-to-value financing with a down payment that can come from a gift, grant and various other sources. There is no minimum amount required from the borrower.
2. Flexible underwriting and income sources.The rules for HomeReady loans allow for income from extended family living in the home to be considered as a compensating factor. This means a borrower in some cases can count income from adult family members living with them as eligible income.
3. Online homebuyer education.HomeReady requires about six hours of online homebuyer counseling (cost: $75), which covers the fundamentals of buying and owning a home. This great education also comes with optional one-on-one counseling if desired. Plus, borrowers get access to counseling for the life of their loan to provide post-purchase homeownership support.