Dated: 06/25/2020

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Too many Americans who want to buy a home feel they can’t because they don’t have the cash to put 20 percent down on the mortgage.

Did you know that 20 percent is “so yesterday?”  Yet the general public is still operating under this illusion.

In fact, according to a NerdWallet.com survey, 44 percent of Americans think that the 20 percent down payment figure is written in stone.

Sadly, the respondents who don’t currently own a home said that what’s holding them back is the lack of this large down payment.

It’s safe to say that the down payment is one of the biggest obstacles to home buying today. And, it doesn’t have to be.

Especially for Renters...  There are various first-time homebuyer programs that many can qualify for!

1. Fannie Mae’s 3-percent-down mortgage

Launched a few years ago, Fannie Mae’s Conventional 97 is a brilliant alternative to the FHA-backed loan. In fact, it is “among the most in-demand programs for today’s homebuyers,” according to Dan Green at TheMortgageReports.com .

Conventional 97 is what FHA used to be — ideal for both the first-timer and repeat homebuyer who lacks a large down payment. While borrowers are still required to purchase mortgage insurance, the premiums “are usually less expensive than those of comparable FHA home loans,” according to Green.

Best of all, according to Tim Lucas, editor at MyMortgageInsider.com, borrowers can qualify with scores as low as 620 and “gift funds can be used for the down payment and closing costs.”

Contact me today and I will put you in touch with my preferred lender to learn more about how to this can help you!

2. Freddie Mac HomeOne℠ loan

There are only a few conventional lenders that are approved to offer the HomeOne loan from Freddie Mac.

Like Fannie Mae’s loan, it allows you as an eligible first-time homebuyer to achieve the dream of homeownership.

Features include:

  • No income limits
  • No geographical limits
  • Allows for the purchase of a single-family home, condo or townhome

Buyers are required to have at least 3 percent for a down payment and a credit score of at least 620. If first-time buyers, borrowers must agree to attend a buyer education course.

Naturally, there is more to know about Freddie Mac’s HomeOne loan. I can get you the details from my preferred lender or you can get them online at SFFreddieMac.com.

3. Freddie Mac Home Possible®

Freddie Mac offers an alternative to the HomeOne loan and that’s the popular Home Possible mortgage. This program is ideal for lower-income buyers who lack a big down payment and require “flexible sources of funds.”

These sources can be family members, employer assistance “secondary financing and sweat equity,” or a combination of these, according to Freddie Mac’s website.

A buyer’s qualifying income (on an annual basis) cannot exceed 80 percent of the AMI.

There’s a 3 percent down payment, but unlike other similar programs, a borrower can quality for 105 percent LTV with Freddie Mac’s Affordable Seconds®.

Maybe this is an option if you are a low-income buyer, move-up buyer or retiree.

4. HomePath Ready Buyer™ program

Another Fannie Mae program, HomePath Ready Buyer, offers 3 percent down payment assistance for qualified borrowers who agree to participate in an online homebuying course and then purchase a HomePath property.

As the Buyer, you will need to request a course completion certificate and then we’ll need to include it when we submit the offer on a HomePath property.

“The request for closing cost assistance must be made at the initial offer in the HomePath Online Offers system,” according to information on the HomePath website.

The website includes the verbiage that we will need to use to make the request for closing cost assistance for you. 

The only catch, you must not have owned a home within the past three years, you must agree to reside in the home as your primary residence and take possession within 60 days of closing.

There are a ton of other programs out there that I can use for you.  Don't be a reluctant buyer who thinks that they can’t buy without a huge down payment. Contact me today!

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Michelle Meenach

Cincinnati’s Top 3% | Sr Sales Vice President | selling Fast for Top Dollar | from Neighborhood to Luxury, I'll help you find the Home you Love As your Realtor, I bring a breadth of experience and ....

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