On December 12th, Fannie Mae will go live with their HomeReady program aimed at credit-worthy buyers who need a little extra flexibility on the debt to income ratios, down-payment source and monthly mortgage payment verification after purchase.
A crucial part of mortgage underwriting is evaluating your debt-to-income ratio. With student loans, car payments, entry level job salary, lenders may view your debt as too high and only count the loan applicants income. With the new program, Fannie Mae will also consider the income of anyone living in the home as “non-borrower” contributors, or parents who help pay your mortgage or gift you the down payment.
With the ever changing dynamics of a traditional home, lenders understand that many homes consist of extended and blended families which makes it hard to qualify if you have people assisting with the bills but no real way to document it. Twenty-five percent of Hispanic homes are multi-generational, 20 percent of African Americans and 17 percent of Asians. The traditional home is no longer mom, dad and children.
To help bridge the gap, the HomeReady program offers the following:
- Down payments as low as 3%
- No minimum contribution from you toward the down payment on a single family home purchase
- You can add income of one or more household residents to strengthen your income qualification but not be considered borrowers on the loan.
- When non-occupants are part of the picture, the minimum down payment increases to 5%
- The Program allows you to count income from in-house boarders (someone who rents a room)
- Everyone who qualifies for the program will need to complete an online home- purchase education course.
The new program is set to take effect on December 12th but feel free to reach out to us and be connected to a lender who already understands the program and can help you get pre-approved today!
Email us for inquiries at Contact@MandrellCo.com