Fannie Mae* has announced a new program that rewards those with high credit scores of 720 or more, even when they don’t have enough money for a regular down payment. This new incredible program offers these amazing features:
1) Only 1% of the purchase price as down payment. This money MUST be from the borrower’s own funds.
2) This program is for singe family residences only, but can be a single-family home, a townhome, condo or a villa.
3) Fannie Mae literally gives the borrower 2% of the price (with a maximum of $5,000) of a single-family property to use as the remainder of the down payment.
4) The Borrower must be an Owner Occupant — this program is not for investors and there cannot be a non-occupant co-borrower helping to get a loan.
5) In some areas, the maximum income must be less than $59,800, but there are many areas where there is not an income limit.
6) The closing costs can be a gift, or the Seller can pay the closing costs up to 3% of the purchase price.
So what does all of this mean? Let me give you an example: Let’s say you want to buy a house for $250,000. Normally, you would need at least $12,500 for a down payment (this would be 5% down for a conventional mortgage) and about 3% of the purchase price for closing costs, or $7,500. So cash out of pocket would be about $20,000.
With this amazing program, you only have to pay 1% out of your pocket, or $2,500!! Your closing costs could either be gifted to you, or it could be arranged for the Seller to pay 3% of the purchase price towards your closing costs. Now keep in mind that in order for the Seller to do this, the price would have to reflect the increase of costs to the Seller, so would most likely be 3% higher than it could be without any closing costs. However, this is a very normal procedure that allows the buyer to pay less money up front, and to finance the closing costs as part of the loan.
This program makes home ownership very reachable. If you are interested in learning more about this fantastic program, call Scott Chinchar, Clearwater Mortgage, 727-259-5900 and tell him that you read about this on the Ryan Realty website!
*Fannie Mae is a private, shareholder-owned company created by Congress in 1938 to bolster the housing industry during the depression. Fannie Mae facilitates homeownership by adding liquidity to the mortgage market when it purchases loans from lenders who use the funds received to make additional loans. Fannie Mae finances mortgage purchases by issuing its own bonds or by selling mortgages it already owns to financial institutions.