“HomeReady will be available to borrowers at any income level for properties in designated low-income census tracts, and to borrowers at or below 100% of area median income (AMI) for properties in high-minority census tracts or designated natural disaster areas,” Fannie Mae says in a release.
The program, which will replace Fannie Mae’s MyCommunityMortgage, eliminates or caps standard loan level price adjustments – additional fees often applied to clients who show various credit risk factors.
It also requires borrowers to complete an online education course to help prepare them for the buying process, and also offers post-purchase support to help them manage the debt.
It also allows buyers to purchase a home with as little as 3% down.
“HomeReady will help qualified borrowers access the benefits of homeownership with competitive pricing and sustainable monthly payments,” Jonathan Lawless, vice president for underwriting and pricing analytics at Fannie Mae, says in a release. “We are also confident this mortgage option will create business opportunities for lenders serving the changing demographics and borrower needs seen in today’s market.”
Originators based in these lower-income areas will benefit, as it opens up a pool of potential clients who would otherwise have failed to qualify for mortgages under more traditional programs.
Fannie Mae will release more information on the program in the coming weeks.
HomeReady, a new program from Fannie Mae, aims to allow credit-worthy low-income earners access to home ownership.