Many homebuyers cite saving funds for a down payment as one of their biggest obstacles on their path to homeownership. Fannie Mae has introduced the MyCommunityMortgage® program which features flexible home financing with as little as 3 percent down, opening the gates to homeownership for potential homebuyers with a lack of funds for a down payment.
Who is MyCommunityMortgage® for?
The goal of this Fannie Mae program is to provide a responsible and affordable financing option for qualified low to moderate income borrowers.
Benefits of MyCommunityMortgage®
MyCommunityMortgage® will appeal to a wide range of borrowers because of the small required down payment, as well as its other features that make homeownership a reality for borrower, including:
- Allowance of gifted down payment. The 3 percent required down payment can come from personal funds, gift funds, and government grants.
- Low private mortgage insurance (PMI) rates. With any mortgage program in which borrowers have more than 80 percent loan-to-value (LTV), private mortgage insurance is required. MyCommunityMortgage® boasts lower PMI rates than that of other low down payment programs, such as an FHA loan.
- Underwriting flexibility. This means the lender may consider non-traditional forms of credit history, such as rent or utility payments, and may allow higher debt-to-income ratios.
Who is Eligible?
Borrower eligibility for this program is subject to income, credit, and property requirements, as well as the following conditions:
- Completion of homebuyer education. If the borrower is a first-time homebuyer, they must complete an approved homebuyer education course. If two borrowers are first-time homebuyers, only one borrower needs to complete the course.
- Borrower income cannot be more than 100% of the HUD area median income.
- Only owner-occupied 1- unit principal residences, including eligible condos, co-ops, and PUDs allowed (manufactured housing is not permitted).
For additional information about Fannie Mae’s MyCommunity Mortgage, contact one of our mortgage bankers.