Fannie Mae Launches New HomeReady™ Mortgage Programadmin
Fannie Mae just announced an exciting new, affordable lending product called the HomeReady™ Mortgage. What separates it from other programs is for the first time ever Fannie Mae is considering income from family members living in the house, but not signing on the loan. Also the HomeReady™ Mortgage only requires a 3% down payment. Standard conventional loans require 5%, FHA requires 3.5%. Grants are available to help with down payment.
My favorite new feature with the HomeReady™ Mortgage is that it considers rental income from mother-in-law units in qualifying borrowers. This means that if your property has an accessory unit that can be rented out we can count that rental income which helps you qualify for a nicer larger house. For example, a young family with one small child who would like to have three more. They find a beautiful house with a basement apartment. They don’t need the room in the basement now, but they’ll need it in the future. They can qualify for a HomeReady™ Mortgage because they can rent the basement apartment now and include the rental income in their application. As their regular income grows, they won’t need to rent the basement apartment and can convert it into space for their growing family.
Who else will benefit most from this program? First, we have multi-generational families. There are more multi-generational families in 2015 than ever before. Baby Boomers are moving in with their children. College graduates are moving in with their parents to save money or because they can’t find jobs. With the HomeReady™ Mortgage, income from all the household members may be considered. For example, retired parents may move in with their children. Their monthly social security income may be used toward qualifying their children for a loan, without them signing or obligating themselves on the loan.
Couples where one person has good credit and the other has poor credit also benefit from this program. For example, a married couple each make $2,500 per month. The wife has great credit, but the husband’s credit is terrible. Their combined $5,000 monthly income allows them to easily afford a $1,400 house payment. Unfortunately, the husband cannot be on the loan because of his bad credit, and the wife’s income isn’t enough to qualify for a mortgage. Now with the HomeReady™ Mortgage, the husband’s $2,500 income can be considered even though he won’t be a signer on the loan.
What does the HomeReady™ Mortgage really mean for home buyers ? Buyers who couldn’t afford or qualify for a mortgage loan yesterday may be able to today. This increases the pool of available buyers and will increase demand and home prices.
If you know anyone who hasn’t been able to qualify for a mortgage but fits into one of the above scenarios please call us with their name and phone number. We love referrals.