Flexible New Loan Program Offers 3% Down For First Time Homebuyers
There’s nothing quite like the feeling of walking through the front door of your new home for the very first time. Homeownership lies at the heart of the American Dream, but hefty down payment and closing costs can make owning a home feel like a distant daydream for first-time homebuyers with limited savings.
Fannie Mae’s new loan program called MyCommunityMortgage® (MCM®) reduces the minimum down payment to three percent and offers flexibilities on credit, income sources and access to special options. Here are some of the program highlights:
Assistance with Closing Costs or Down Payment
In addition to lowering the down payment to three percent, MCM® is flexible on the source of down payment or closing costs. Gifts from relatives, or even your employer, are allowed as long as your credit score is between 619 and 580.
Less-than-perfect Credit is OK
The program allows credit scores between 619 and 580, which is significantly lower than other home loans.
Nontraditional Credit History
If you lack a history of using credit cards or loans, alternative payment data is permitted, such as information from your landlord or utility company.
Special Features for Certain Individuals
Teachers, police officers, firefighters, health care workers, persons with disabilities and people living in underserved areas are allowed higher debt-to-income ratios, gifted reserves and consideration of part-time and overtime income with 12-month history to qualify for a bigger loan amount.
Lower Mortgage Payments
Reduced private mortgage insurance (PMI) premiums may also be available, which will reduce your monthly mortgage payment significantly for those who qualify.
Other resources that you might find helpful include articles from the New York Times
If you would like to learn more about this loan program, or others, connect with one of our New Home Specialists about getting on the path to homeownership.
Benchmark Homes Group