4 MORTGAGE PROGRAMS THAT WILL HELP YOU STOP RENTING, AND START BUYING

Dated: November 15 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”...  STOP operating under this illusion, specifically if you are a first-time buyer.

In fact, 44 percent of Americans think that the 20 percent down payment figure is written in stone.

Sadly, most people we talk to, 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.

Well, let me tell you...  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”

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”

Best of all, borrowers can qualify with scores as low as 620 and “gift funds can be used for down payment and closing costs.”

2. Freddie Mac HomeOne℠ loan

Like Fannie Mae’s loan, the HomeOne Loan allows you to help eligible first-time homebuyers 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. You can get the details either from your preferred lender or 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 deal 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®.

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.

It’s important for you to understand...  You will need to request a course completion certificate and then you’ll need to include it when you 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 the buyer’s agent needs to use to make the request for closing cost assistance for the buyer. 

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

There are plenty of other programs out there that will help reluctant buyers who think that they can’t buy without a huge down payment. Just ask me about them :)

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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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