What is the My Community Program?
The My Community Program is designed by Fannie Mae and this program is designed for moderate income home buyers who have limited funds for the down payment and closing costs.
Even when your credit scores are below 660, no money down is still possible. It is well known that borrowers with middle scores in the low 600's have been approved. Higher credit scores will compensate if you have high debt-to-income ratios. Typically a 620 fico score is recommended and we have seen debt ratios of 64% get approved. Higher fico scores will improve your approval odds greatly. This is a full documentation program. There are additional qualifying flexibility options for teachers, police, military personnel, firefighters, health care workers, and those borrowers with disabilities..
There are income limits for this program. Borrower's income must not exceed 100% of the medium income for the designated area. Check the HUD income limit for your area, for example, the HUD income limit (https://www.efanniemae.com/sf/refmaterials/hudmedinc/index.jsp) for My Community loan in Montgomery, Prince George's, Calvert, Charles, and Frederick County, Maryland is $94,500.
If you were to choose an FHA loan, you will be required to put 3% into the transaction. With My Community there is no minimum requirement. FHA loans have upfront Mortgage Insurance (MI), plus your monthly Mortgage Insurance.. With My Community, Lender Paid MI is an option. This means that you can opt for a slightly higher interest rate so you will have no mortgage insurance. If you choose the mortgage insurance option, My Community allows for a reduced MI of 20% coverage or a factor of .59%, and there is no upfront fee (fha has). A $180,000 loan would cost $88.50/month, which is $54.50 less than the old premium calculation of $144.00/month. The loan must get approved through our automated Fannie Mae engine first, to get this lower MI rate.
This program is very popular and is putting many first time home buyers into their otherwise unattainable homes.
Highlights include:
- 100% financing up to $417,000 loan amount. 97% for 2 unit property, and up to 95% for 3 or 4 unit.
- Available for home purchase or refinance. You do not have to be a first-time home buyer.
- Fixed and adjustable rate products available, including Interest-only and 40 year ammortizations.
- up to 6% contribution from the seller, which must be used towards the closing costs and prepaid items.
While searching more about My Community I came across one of our members posts about My Community and Recent Changes:
http://activerain.com/blogsview/127800/My-Community-Loan-Program these changes take affect as of 10/12/2007.
http://www.fanniemae.com/homebuyers/findamortgage/mortgages/mycommunity.jhtml
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