HomeReady Mortgage Program   Are you trying to get out of the ever-increasing rental market but find that loan programs don’t fit your family income requirements because they can’t count the income of extended family that live in the same house? Or what about outside the house family support such as from parents?
HomeReady, the new Fannie Mae mortgage program for low-to moderate-income households is ready to roll out the details and start the program in December, 2015. Lenders will now be able to qualify borrowers by including income generated by non-borrowers living in the household. Jonathan Lawless, Fannie Mae’s VP was quoted in recent discussion reported by Lisa Prevost of the Herald Tribune: “So it’s not only common to have multiple generations or more than one family living in the same house,” he said, “but it’s something that actually helps support the household.”
The down payment requirement remains as little as 3 percent. Fees and mortgage insurance requirements will also be lower than on standard loans. All borrowers must complete a homeownership education course. The program, previously called My Community Mortgage is no longer limited to first-time homebuyers but is offered to repeat buyers in hopes to “help homeowners who lost wealth (in the form of home equity) when property values plummeted, Lawless said.
Income requirements for purchasing in low- and moderate-income communities will differ depending on the census track the property is in. Some neighborhoods were hard hit by the housing market collapse, primarily because of loose lending practices that targeted low-income areas.
Wells Fargo is the first to get on board with the specialized program and focuses on efforts to better serve low- and moderate-income communities by increasing the company’s presence in those areas, diversifying its sales and underwriting staff, and offering more specialized mortgage programs. Is this a sign that credit is continuing to loosen? Time will tell. But, the focus is on the ability of the borrower to pay back the loan according to Brad Blackwell, an executive vice president of Wells Fargo.