Fannie Mae: MyCommunityMortgage Out, HomeReady ™ In

Great news for homebuyers in the United States – the government has backed a new low down payment mortgage program which is now available in all 50 states.

The program only requires a 3% deposit and is officially known as HomeReady ™.

HomeReady ™ targets middle-income and lower-income homebuyers, although the program can be used by just about anyone, depending on where you live. This is an advanced, user-friendly version of Fannie Mae’s MyCommunityMortgage (MCM) program, which was retired at the end of 2015.

HomeReady ™ is Fannie Mae’s latest program to provide mortgage access to creditworthy borrowers who might otherwise not have access to a home loan.

The program can be used by borrowers of any income level in low income census tracts across the country; and, with average income or less in large minority census tracts and designated disaster areas, such as areas affected by floods, storms or forest fires.

HomeReady can also be used by any homebuyer whose income is at least twenty percent below the area average.

HomeReady ™ mortgage rates are often lower than typical conventional mortgage rates.

Check your new rate (May 24, 2021)

HomeReady ™ for home buyers

As a home buyer, there are a number of reasons to consider the HomeReady mortgage program.

First, the program requires a down payment of only three percent; and the program isn’t just limited to first-time homebuyers.

The ability to make a down payment of less than 20% can be important for tenants who want to make the transition to homeownership. For many, this can mean the difference between being able to buy a house and having to rent for another year.

Second, unlike most other loan programs, the HomeReady ™ program has no minimum “investment” requirements. This means that buyers can get their 3% down payment in the form of cash gifts or grants.

Buyers do not need to bring their own money at the close.

Third, with the HomeReady ™ program, buyers can use the income of anyone living in the home to qualify. This is particularly useful in multigenerational and extended households, where each contributes to the family’s expenses.

Other benefits of the HomeReady ™ program include Resident Income Allowance to help qualify and access low mortgage rates at high LTVs.

Check your new rate (May 24, 2021)

Other Benefits of HomeReady ™ Home Loan

The HomeReady ™ mortgage program is supported by government agency Fannie Mae, which is the country’s largest funder.

This means homebuyers can enroll in the HomeReady ™ program with any bank or mortgage lender across the country.

And the banks are offering low mortgage rates.

Because HomeReady ™ specifically targets low to moderate income households, the program waives many of the loan fees that come with conventional “standard” home loans.

By using HomeReady ™, you can have access to current mortgage rates up to 50 basis points (0.50%) below the rate of a comparable 97 conventional loan, that of Fannie Mae other three percent down payment program.

In addition, private mortgage loan insurance (PMI) rates are also reduced, making the HomeReady ™ home loan a relative boon for buyers who choose to use it.

Buyers who use HomeReady ™ also have a full range of mortgage products to choose from.

The program is available as a fixed rate mortgage or a variable rate mortgage (ARM); with duration choices of 10 years, 15 years, 20 years or 30 years.

You can even use HomeReady ™ on a multiple unit home.

If you are purchasing a 2-4 unit house and intend to live in one of the units in the house, you can apply for HomeReady ™ as an owner-occupied property (i.e. Primary Residence ),

HomeReady ™ cannot be used for an investment house.

What are the current HomeReady ™ mortgage rates?

The HomeReady ™ mortgage program offers low mortgage rates, reduced mortgage insurance requirements and flexible underwriting guidelines to qualified buyers.

Get current mortgage rates now. Your Social Security number is not required to get started, and all quotes come with access to your live mortgage credit scores.

Check your new rate (May 24, 2021)

About Alma Ackerman

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