Get Ready ... "HomeReady" from Fannie Mae

Get Ready ... "HomeReady" 

from Fannie Mae    

After years of warranted tightening of guidelines in the Mortgage Industry, there are some new changes taking place that help to "relax" some guidelines, as they pertain to Fannie Mae (Conventional Loans) ...

Come mid-July, 2017, Fannie Mae's Automated Underwriting Systems will be "tweaked" to allow up to a 50% Total Debt-to-Income Ratios (DTI) ... in some cases, not all.  

I think there will be a sort of "learning curve" that takes place during the early days of this "tweak" ... but, you can probably safely assume that the following will NOT fall within those scenarios considered for the new higher 50% DTI:

• Low Credit Scores
• Low Down Payments/ Limited Assets
• Unstable Employment Histories

In addition to its upcoming increased Debt-to-Income Ratios, Fannie Mae just recently took a more flexible (generous to Borrowers) stance on calculating of Student Loan Debt. (Should you have Student Loans, please contact me to discover if this change benefits you.) 

A third change by Fannie Mae was put into place last year with its implementation of a 3% (minimum) down payment program known as "HomeReady" * ...

Below you'll find the major highlights of Fannie Mae's "HomeReady" program:

• Forgiving Credit Scores 
• Reduced Private Mortgage Insurance (PMI) rates  
• PMI is cancellable, per Servicing Guide policy
• Interest Rates as favorable, if not lower, than traditional Conventional Loans
• Flexible Income Guidelines allowing:

       A.  Non-Borrowing Spouse

       B.  Non-Borrowing Boarder/Rental Income

• Flexible Funds for Down Payment and Closing Costs, allowing Gift Money and Seller-Paid Credits for Closing Costs, etc.
• There is no minimum contribution required from the Borrower’s own funds 
• Allows Buyers that have been homeowners previously (Do NOT have to be First-Time Home Buyers)
• Expanded Debt-to-Income Ratios to 50% (in certain cases)
• ALL property types are allowed, i.e. Condominiums, Townhomes, Single-Family, 2-4 Units (Properties must be Owner-Occupied) 

It's my opinion that "HomeReady" is a financing option that's presently being under-utilized.  HomeReady's cousin at Freddie Mac ("Home Possible") is included in my assessment, as both Programs can be smartly and responsibly implemented to enhance financing options for a segment of Borrowers that might not qualify for other traditional financing programs.  "Home Possible"  and "HomeReady" may also allow some Buyers to qualify for a purchase/ownership of a higher-priced home ... something that had eluded them previously.

For those that might fear a return to the more free-wheeling lending guidelines in play prior to the housing downturn:  Neither of these programs is a reckless, no documentation, "look the other way" financing option.  The financing offered via these programs requires Home Ownership Counseling ... an educational session that the overwhelming majority of participants have reported as a great benefit to them. 

"HomeReady" can prove to be a very viable option for those Borrowers challenged financially by Student Loan Debt.  It also addresses challenges for those that rely on more non-traditional income sources.  For both scenarios, it certainly is worth consideration.

For those that find themselves in these circumstances and are hoping to buy a home in the New Lenox - Will County - Chicagoland area, reach out.  I'll investigate all your options and get you on the path to buy and finance a home successfully ...

* Hoping to Buy or Refinance a home in the Chicagoland area? Contact Me! I'll put my 40 years of Mortgage experience and expertise hard to work on your behalf.
I'm easily found at:

Gene Mundt

Mortgage Originator - NMLS #216987 - IL Lic. #031.0006220 - WI License 216987

American Portfolio Mortgage Corp.

NMLS #175656

Direct: 815.524.2280

Cell or Text: 708.921.6331

eFax: 815.524.2281

gmundt@goapmc.com

www.genemundt.com

              

         

Gene Mundt, Mortgage Originator, an Originator with 40 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking: Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including: The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL & WI. 

Referrals are Greatly Appreciated and Welcomed!