WASHINGTON Fannie Mae is revamping its affordable mortgage program to make it easier for low- and moderate-income families to qualify for low-down-payment loans.
The new HomeReady program will allow income from nonborrower household members to be included in debt-to-income calculations and reduce or cap certain fees to make it easier for borrowers to afford the 3% down payment, according to a press release issued Tuesday. Additionally, the program will be available to repeat buyers for the first time, removing a limitation for first-time homebuyers. Rental income from a basement apartment will also count toward the borrower's qualifying income.
"HomeReady will help qualified borrowers access the benefits of homeownership with competitive pricing and sustainable monthly payments," Jonathan Lawless, a Fannie Mae vice president, said in the press release.
Fannie is also making it easier for lenders to offer the new program by automatically flagging eligible borrowers on Desktop Underwriter. Previously, lenders had to do certain calculations and analysis before submitting a mortgage for underwriting.
Applicants for a HomeReady mortgage will have to complete a homeownership course. But Fannie is providing access to an online education course to make it more accessible for borrowers.
"We are also confident this mortgage option will create business opportunities for lenders serving the changing demographics and borrower needs seen in today's market," Lawless said. "The combination of our risk management safeguards and an innovative online education tool will put HomeReady borrowers in a strong position to succeed in homeownership."
Fannie will start accepting loan deliveries for HomeReady mortgages later this year.