Now that the reign of No-Money-Down, Credit-Doesn't-Matter loans are sinking into the sea, it's getting a little tougher for first time home buyers and those credit-challenged buyers to get the financing to buy a home. Here's a couple of options:
1. Fannie Mae offers an Expanded Approval program- lenders can now say ‘yes' to borrowers with blemished credit. You might have a bit higher interest rate, but you'll also have a stable fixed-rate loan. Your lender will need to be able to submit your application through the Fannie Mae Desktop Underwriters system. Some lenders can also offer a bonus Timely Payment Rewards option- this feature rewards the home buyer's good payment record by reducing the interest rate (when was the last time you had a bank thank you by reducing your interest rate?!?).
2. Fannie Mae also has a program called My Community Mortgage. It's a flexible mortgage designed for low and moderate income borrowers. There is no minimum borrower contribution, the mortgage can go up to 40 years, and it's possible to get 100% financing.
3. Freddie Mac has a similar program called the Home Possible Mortgage, with both fixed rate and adjustable mortgages. The Home Possible mortgage has a unique feature that allows the buyer to own another home.
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